Investors in hedge funds should have made better returns already in 2015 than they did in the whole of 2014, according to new data.
In May, hedge funds continued a run of solid performance with a fifth straight positive month, returning 1.01% in May, data monitor Preqin said.
“The better performance eases some concerns investors may have had about the value of investing in an asset which charges two and twenty.” —Amy Bensted, Preqin“This means hedge funds have now returned 5.44% for 2015 year to date compared to 4.60% for the whole of 2014,” Preqin’s report said.
All leading single-manager hedge fund strategies made gains in May, with equity strategies generating the highest return of 1.28%.
Leading the pack at the end of May were Asia Pacific-focused hedge funds with a return of 11.03% in the first five months of the year. In second place across this time horizon were activist strategies, with a 9.41% return.
“Following a disappointing 2014, where the benchmark struggled to hit 5% and investors began to show signs of losing patience with the performance of the asset class, this return to better performance is obviously a good sign,” said Amy Bensted, head of hedge fund products at Preqin.
The worst performers so far in 2015 were CTA fund-of-hedge-funds with a 1.17% return—but in the 12 months to the end of May this strategy made 21.9%.
“Stringing together a set of positive returns this year has been welcomed by both investors and fund managers,” said Bensted. “The better performance eases some concerns investors may have had about the value of investing in an asset which charges two and twenty, and reinforces the place that these assets should form in a diversified portfolio.”
Eurekahedge data showed the sector’s assets grew by $92 billion in the first five months of the year, with almost a third of this coming from new investor allocations.
However, despite absorbing most investor assets, North American managers only managed to take in half of the flows they received in the same period last year, Eurekahedge said. These managers saw $17.5 billion in new assets.
Related:Private Pensions Join Hedge Fund High Rollers & How HF Managers Are Wasting Alpha