WEST PALM BEACH, FL (HEDGECO.NET) – The European hedge fund market is experiencing significant growth in 2004, according to Naim Abou-Jaoude, head of alternative investments for Dexia AM. Such growthis faster than the recorded growth in the global hedge fund market. Mr. Naim Abou-Jaoude was speaking to a news conference when he made his remarks. According to him, quoting data from EuroHedge,assets managed by European hedge funds has grown to $216 billion in June 2004.
The global hedge fund market has grown by 13% to $866 billion in the same period. The European hedge fund industry has steadily grown at about 33% annually since 1998. According to Abou-Jaoude, the fastest growing hedge fund strategy in the world is the long/short strategy which gained about $8.4 billion out of the total of $30 billion of the new assets coming into hedge funds.
According to Abou-Jaoude, in 1990 long/short equity strategy accounted for only 7.6% of hedge fund�s total managed assets. He noted however, that the popularity of the long/short equity strategy is diminishing; more investors are now favoring fixed income, credit and arbitrage strategies. Part of the problem according to him was slowing volatility levels. Abou-Jaoude said, “Because of low volatility in equities it’s difficult for managers to make money (in those strategies) but on the credit side there are still inefficiencies in place.”
About 47 European hedge funds closed this year so far according to him, and another 129 new hedge funds came to the market. Most of the new hedge funds launched were also long/short equity portfolios Abou-Jaoude said.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
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