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Emerging Market Hedge Funds Reach Fresh Record For AuM In Q3; China Shines
Hedge funds focused on emerging markets hit a new record for assets in the third quarter, with segments such as Chinese funds faring strongly, data shows.
Hedge funds focusing on emerging markets scaled to new heights in terms of assets under management in the third quarter of 2016, reaching $199.66 billion, a gain of $9.8 billion from the previous three months, new figures show.
The increase was fueled by performance-based quarterly gains, which helped offset a net investor outflow of $850 million, according to Chicago-headquartered Hedge Fund Research.
Separately, the firm’s HFRI Emerging Markets (Total) Index gained 5.06 per cent in Q3 and added 1.10 per cent in October, led by regional exposures to Latin America, Russia, and emerging Asia; the HFRI EM Index is up 9.1 per cent year-to-date through October.
Hedge funds focused on Latin America extended the powerful YTD surge, leading all areas of hedge fund performance through October. The HFRI EM: Latin America Index rose 6.2 per cent in Q3, and added another 5.4 per cent in October, bringing YTD performance to 33.0 per cent.
Hedge funds investing in Russia and Eastern Europe also posted strong gains, with the HFRI EM: Russia/Eastern Europe Index gaining 6.5 per cent in Q3 and 1.0 per cent in October, increasing YTD performance to 20.7 per cent, driven by gains in both Russian equities and the rouble.
As of Q3, over 170 hedge funds were regionally focused on Russia/Eastern Europe, with these managing an estimated $28.9 billion, HFR said.
In the emerging Asia segment, performance was led by the HFRI China Index, which advanced 7.3 per cent in Q3, making good the decline from the first half of the year to post a narrow gain through the quarter.
Middle East bucks the uptrend
The only regional area of EM performance to suffer a decline in
Q3 was the Middle East, as the HFRI MENA Index fell 0.5 per cent
in the quarter before rebounding 2.0 per cent in October,
settling YTD performance at 4.7 per cent thus far in 2016.
An estimated 50 hedge funds are focusing their exposures in the MENA region, with total capital at approximately $4.3 billion.
