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Industry surge not enough to propel macro hedge funds

By   /   February 5, 2014  /   No Comments

Though the financial sector has been revitalised since the crisis of 2008, there are still issues for long-term macro hedge funds in terms of capital.

eVestment, a data monitoring firm, has recently stated that managed future-based and macro funds are troubled by capital outflows in combination with poorer performances in recent months.

These longer strategies can often take more time to recover from financial damage, given their more extensive style of investment. Hedge funds with more immediate styles of approach have fared better over the past five years, eVestment found.macro hedge fund management

The cumulative profit for macro style strategies made just under 50% of the developments that hedge funds made, with little progress seen in managed future funds since late 2010. For the 2013 fiscal period, a return of 2.84% was made by macro funds and 1.87% was lost by managed future funds.

Liquidations played a significant part for these types of hedge fund, with fundraising taking a back seat for newcomers to the market. eVestment speculated that the consecutive years of low performance led to a flatline in recovery, leading to companies missing out on vital goalposts and leading to liquidation. The number of assets controlled by these firms dwindled throughout 2013, in direct contrast to the remainder of the industry which drew more capital to thrive.

Experts have estimated that the problem will continue for the next fiscal year, as the strategies still do not have a significant payoff for the near future. However, longer term, these strategies may pull through as their dividends recover.

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