Equity long/short funds see rebound
Such funds received net inflows of $9bn year to date compared to outflows of $11bn in 2013. European equity long/short managers have had high demand from investors globally, the bank said.
“Over the course of the year, we saw European allocators, as well as their global peers, search for high-quality fundamental stock pickers with capacity,” the bank said in the report.
Equity long/short managers had performance-based gains of $79bn compared to $57bn in 2013.
Overall the hedge funds industry grew in 2013 to $2.51trn by the third quarter, higher than investors’ predictions that hedge fund assets would rise 11% by $2.5trn.
The report also revealed that a number of institutional allocators pay a disproportionate amount of their overall fees to their hedge fund managers, which in aggregate account for a relatively small percentage of the portfolio.
“As such these allocators have been increasingly focused on the average management fee that they pay out to hedge funds, and are keen to lower this absolute level,” said Deutsche.
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