Hedge fund news has not been this good in quite a while for North America-focused vehicles. Although October saw these funds incur a loss of 0.69 percent, returns were at 2.89 percent in November, improving year-to-date returns to 9.09 percent. As such, North America funds are still outperforming all other regions so far.
Stats have been encouraging across the board
Speaking in general terms, November was a very good month for the hedge fund industry. Based on the latest readings from the Preqin All-Strategies Hedge Fund benchmark, gains were at 1 percent in November, boosting YTD totals to 6.34 percent. Event-driven strategies did especially well, with gains of 2.34 percent, as all other top-level strategies enjoyed positive returns in November. YTD performance for event-driven funds is at 10.74 percent as of the end of November 2016, and even relative value funds, which have the lowest performance thus far, are doing solidly, with YTD returns of 4.08 percent.
Election results drove hedge fund strength in North America
One reason why the hedge fund news was so good, according to reports, was the outcome of the 2016 U.S. presidential elections. This was theorized in a statement from Preqin’s head of hedge fund products, Amy Bensted.
“Hedge funds focused on North America generated healthy performance in November and exceeded all other regions, as firms capitalized on opportunities arising from the US election result,” said Bensted. She added that most hedge fund managers surveyed in November 2016 expect the good news to continue over the last few weeks of 2016, and while European and Asian funds have only experienced “marginal” gains, all regions were solid or better year-to-date.
Things are looking good in 2017, and could get better
Preqin’s Bensted also noted that the hedge fund industry may have more good news to look forward to in 2017, as performance may likely beat 2014 and 2015 levels. But there are other reasons why 2017 may be a good year for the space, and they mainly relate to the companies hedge fund managers deal with for their asset servicing needs.
Given the relatively new premium on transparency and accuracy and the regulations instituted in the aftermath of the economic crisis, more fund managers are outsourcing their back and middle office to third party companies. With these companies making life easier for fund managers, it can be said that 2017 has all the potential in the world to be a better year for hedge fund news.
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