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Alternative Ucits AuM reach all-time highs

31 July 2014


Record set despite alternative Ucits strategies advancing just 0.52% in H1 2014

Read more: Ucits Alceda Fund Management Michael Sanders

Assets under management (AuM) in alternative Ucits have grown by 15.6% to €184.2bn ($250bn) since the end of 2013, a new record high, according to a new report by Alceda, driven by new investment.

This comes despite the fact that alternative Ucits strategies performed less well during the first half of 2014, advancing just 0.52%, compared to the 5.95% gains seen in the same period last year.

"Investment flexibility, demand for absolute return solutions and profound changes in the hedge fund industry and supportive regulatory framework are driving this expansion over the long term," said Michael Sanders, CEO and chairman of the board at Alceda Fund Management.

Having ended 2013 as the best performing strategy with 12.3% gains, the AH Equity Long Short Index was flat to the end of June 2014, underperforming most long-only equity indices. Yet equity long-short strategies have seen AuM rise 66.8% to €30.7bn since the end of last year.

Similarly event-driven strategies have seen AuM increase 88.2% to €3.2bn over the period, as global merger and acquisition volumes increase.

"April was a particularly difficult month for equity long-short managers, as despite relatively nominal moves at the index level, there were significant underlying style rotations and unwinding of consensus positions which hurt active managers," said Sanders.

"There is also an issue of capacity which is most acute in equity long-short where 48% of AuM is currently invested in closed funds."
Strong performance in equity and bond markets, both up by 4% in the first half of the year, contributed to multi-asset strategies being the best performing alternative Ucits strategy year to date, with 3.52% gains in line with its strong performance in 2013.

Managed futures was the only strategy to lose assets, declining 6.7% in H1 2014. However, performance has generally improved after a challenging few years.

A total of 16 new Ucits funds were launched across all strategies during the first half of 2014.


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