The latest hedge fund report from Preqin highlights that APAC-focused hedge funds outperformed North America- and Europe-focused funds in Q2 2024.
APAC-focused funds had a net return of 3.5 per cent on average. North America-focused funds returned 0.18 per cent and Europe-focused funds 1.44 per cent. Charles McGrath, AVP, Research Insights, lead author of this report, notes that this is attributed to equity funds, which were some of the best performing funds in Q2 2024 as per Preqin’s APAC hedge funds benchmark. These gains were bolstered by public equity market gains in Taiwan and India specifically.
Overall, Preqin’s All Hedge Fund Index rose by 0.17 per cent in Q2 2024, compared to 5.84 per cent in Q1 2024 and 7.19 per cent in Q4 2023. Inflation concerns persisted early in Q2 2024, with the US Consumer Price Index in particular remaining steady, which, at the time, resulted in doubts about future rate cuts.
Key report facts:
Hedge fund strategies’ performance Q2 2024: Relative value strategies had the highest net return in Q2 2024, at 2.06 per cent. Multi-strategy and credit strategies also performed well, with net returns of 1.44 per cent and 1.14 per cent, respectively. Macro strategies were the only top-level sub-strategies to see a net loss overall, at -0.16 per cent. However, 12-month returns from June 2023 to June 2024 show that macro strategies and equity strategies were the best performing, at 12.90 per cent and 11.10 per cent, respectively.
Equity market exposure and performance: Equity market exposure continues to be a determining factor when it comes to hedge fund performance. Equity-market-neutral strategies were the top performing relative value strategy, and better than most hedge fund strategies overall, at 2.40 per cent net returns in Q2 2024.
Hedge fund investors look at smaller capital deployment: The report shows that a larger share of investors plan to deploy less capital to hedge funds over the next 12 months*. As of June 2024, 79 per cent of investors plan to deploy less than USD50 million to hedge funds, whereas 71 per cent planned to do so, as per March 2024 data.
McGrath says: “Unique to APAC-focused strategies’ outperformance in Q2 2024 was their consistent upward trajectory through the quarter, with gains in each month. North America-focused funds finished near breakeven as gains in May helped to recover some of the decline in April, before a modest uptick in June. This relative outperformance by APAC funds highlights the diversification the region offers to a global portfolio that’s been affected by volatility in even the most stable economies over the past three months.”
