April 19 - Investors pumped $16 bln into hedge funds in Q1 to bring total global hedge fund capital to a record $2.13 trln, according to Hedge Fund Research. But performance hasn't been quite as strong.
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Hedge fund assets in the first quarter surged to a record two point 13 trillion dollars but hedge funds still on the perform many thanks much indices such as X and joining last night to look at the hedge fund winners and losers as president of hedge fund assets can -- he joins me from the London Stock Exchange. Can two point 13 children total that's a big number up and increase was sixteen billion on the quotes of what was behind the increase. He actually it was a it was the it's the increase was. Larger than that for the quarter the increase was about a 130 billion dollars. You -- sixteen billion of net new capital coming from investors. And overall the size of the industry grew because of the performance began in the first quarter as you said earlier approximately 5%. All you asked what was contributing to that and certainly there's an element of -- sophisticated institutional investors that are coming into the hedge fund industry looking for opportunities to. 22 tried to. Two two identify some uncorrelated returns. That they want to that they want to add to their portfolios and also to balance out. Portfolio equity market data. Okay can you mentioned about 5%. The sound on the court so. How much it's actually pretty good isn't so I mean on in the same three months the S&P was up some 12% Brent was up some 14%. You would be better off just investing in a conventional truck a fund. That's true and end it too timid to my earlier point. Really most sophisticated institutional investors better allocating to hedge funds now. Are obviously aware of it and have considerable amounts of their portfolio invested inequities so they're frequently com. Pleased when equities do rally like that I think. That what -- what we've seen from the recent flow data is that. These investors are increasingly looking at their allocations and hedge funds as a compliment to those assets at the same time. While the first quarter was very good these institutional investors have been conditioned. To expect and anticipate in position for volatility. And that's part of the reason that they're increasingly utilizing hedge funds to complement that equity volatility that they become very accustomed to. Okay you mentioned that sixteen billion of next new capital. Where does not going out on investors out looking forward and Tampa strategies and tell the pads on struts his. Yes great question and the reality is that we've seen it trend where increasingly. These this new capital is going towards. Arbitrage strategy and called relative value arbitrage strategies which is fixed income oriented and macro strategies which are characteristically. Uncorrelated with equity markets and other hedge fund strategies. In in the in the most recent quarter we actually saw. A modest capital outflow from the more beta sensitive strategies which include equity hedge and adventure of it. I just to finish up can I am most about you capsule is going answers funds. With established fund managers and funds have who's managed funds of five billion dollars on more of assets under management. So even within the hedge fund world there does appear to be. A sense of safety and cautioned still still at play here. Clearly for a couple of quarters now. Alligators have continued to -- indicate a preference for the industry's most established funds and I think this is very much a function of lack of conviction and on an abnormally high level of cyclical I'll risk aversion or are or low level of risk tolerance. That these Alec is having something that. We do we did observe it in the first quarter it's something I wouldn't be surprised to see that moderate a little bit on as well in coming quarters of 2012. Karen thank you very much my finds there to hedge fund assess president Ken Heinz. Well that's all for now I'm -- to give up -- this the voters.