Hedge Funds on Rebound

July 22, 2020 James Heinsman Hedge Fund News

Institutional investors began funneling money back into hedge funds during the beginning of the second half of 2020. After two years of the industry contracting, hedge funds are beginning to grow again.

According to a Bloomberg Mandates survey, half of the 50 respondents either increased their investments in hedge funds at the beginning of the summer or said they are planning to during the rest of the year. Hedge funds were the most popular alternative investment for those answering the survey, while Private debt had the second largest proportion of increased bets among a total of six distinct types of investment vehicles.

The survey is a relief from the news that hedge funds posted their ninth in a row quarter of net investments flowing out of the industry, in addition to mostly underperforming the rest of the market. During February and March many funds were able to come out relatively unscathed by the market downturn, but on average hedge funds fell more than the S&P 500 during the first six months of 2020.

Bloomberg Mandates conducted the survey from May 14 to June 10. Family offices and pension funds with over $500 billion in assets under management were included. The survey also found that new hedge funds were popping up all over the financial sector after many funds closed. The most popular ideas among survey respondents were to pitch a new fund and to reopen old, closed funds.

Bloomberg Mandates, Hedge Funds, private debt,

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