Hedge funds kicked off 2024 with their “best quarter since the pandemic”, according to data from the Citco group of companies.
Equity and multi-strategy funds led the charge, with a weighted average return of 7.3% across all strategies, building on 2023’s momentum. Equity funds topped the charts at 8.49%, followed by multi-strategy at 7.59% and event-driven at 4.03%. Other strategies like fixed income arbitrage, commodities and global macro also posted positive returns.
Higher hedge fund activity and dwindling ‘greenium’ expected for sovereign bond markets
Asset under Administration (AuA) categories showed positive results, with the largest funds over $3B AuA returning 8.26%. Returns decreased with fund size, with funds between $1B-$3B and $500M-$1B AuA returning 6.69% and 5.15% respectively. Funds with $200M-$500M and below $200M AuA returned 4.72% and 3.54%.
Despite the positive returns, Q1 saw net outflows of $4.4B, driven by equity strategies with outflows of $4.1B. Multi-strategy funds and emerging markets also experienced outflows. However, hybrid funds led inflows at $1.1B, followed by arbitrage, fund of funds and global macro with smaller inflows.
The data providers observed record trading volumes, driven by high-frequency trading in equities and derivatives, alongside sustained interest in fixed income and commodities. Treasury payment volumes hit a new high at 141,806 transactions, up 17% from Q1 2023, reflecting positive economic signs for the US.
Hedge funds adapt to geopolitical strain, embrace fixed income in 2024
Declan Quilligan, head of hedge fund services, Citco Fund Services (Ireland) Limited, commented: “Rallying stocks and record prices of some core commodities have helped get 2024 off to a flying start in hedge fund performance. Hedge funds administered by Citco have now seen six consecutive quarters of positive returns, and while strategies go in and out of favour, as we start 2024 there is a real breadth to those returns, with all strategy types in the green for Q1.
“A new narrative has emerged this year whereby stronger economic growth – and not the prospect of rate cuts – has taken centre stage. While investors will not be complacent, there remain multiple opportunities out there for hedge fund managers, even after the gains we have seen year-to-date,” added Quilligan.
UAE’s Vice President and ruler of Dubai Mohammed bin Rashid Al Maktoum announced a new tax on foreign banks in the emirate on Thursday, representing another change to the country’s tax landscape.
North Korean cyber spies created two businesses in the U.S., in violation of Treasury sanctions, to infect developers working in the cryptocurrency industry with malicious software, according to cybersecurity
Spain has confirmed it plans to scrap its ‘golden visa’ scheme in a blow to wealthy Brits who may have been planning to capitalize on the plan. The Spanish PM, Pedro Sanchez, explained to reporters
Near the top of the business headlines is the battle that Congress has started to wage with Apple Inc. (NASDAQ: AAPL) over the taxes it pays. By some measures, the company barely pays taxes at all.