Preqin has published its Hedge Funds Q3 2024: Preqin Quarterly Update report which shows that Preqin’s All Hedge Fund Index was up 3.48 per cent (by net return) in Q3 2024, up from a 0.39 per cent uptick in Q2 2024.
APAC-focused hedge funds experienced the highest returns on a cumulative net return basis, at 6.47 per cent, in Q3 2024 when looking at Preqin data by geographical focus.
The Chinese government’s plans to stimulate the economy gave these funds a late boost in September, as equities rose. Charles McGrath, lead author of the report, notes this as a key driver of APAC-focused hedge funds seeing the highest returns, even as a selloff in tech stocks negatively impacted APAC-focused funds earlier in the quarter. North America-focused funds and Europe-focused funds returned 3.85 per cent and 2.49 per cent on a cumulative net basis, respectively, in Q3 2024.
Key report facts:
Overall hedge fund returns in 2024: Preqin’s All Hedge Funds Index was up 10.02 per cent in the first three quarters of 2024. However, this is below global equities at 19.1 per cent, but above global investment-grade debt at 3.6 per cent, over the same period.
Equity strategies follow equity markets’ rally: Equity strategies overall had a net return of 4.49 per cent in Q3 2024. Value-orientated and long-bias hedge funds had net returns of 5.58 per cent and 5.54 per cent, respectively, in Q3 2024 – the top performing sub strategies. Value-orientated funds saw returns increase as value equities rose ahead of growth equities, with the former being more sensitive to interest rate cuts.
Multi-strategy funds gain further interest: Multi-strategy hedge funds had a net return of 2.94 per cent in Q3 2024, lower than equity, event-driven and credit strategies. However, top-level strategy searches by hedge fund investors on Preqin Pro shows that multi-strategy funds are the most targeted strategy for the coming 12 months, with 57 per cent looking to allocate to these funds, up from 50 per cent in Q2 2024.
Charles McGrath, Associate Vice President, Research Insights at Preqin says: “Hedge funds rose with global markets in a positive, yet varied, third quarter. The long-anticipated cut by the US Federal Reserve in September capped an eventful period that included a small-cap equities rally, a brief yet jarring shock as funds rushed to exit the yen carry trade, and mixed economic data that simultaneously fuelled and exorcised the spectre of a US recession.”
