Hedge Funds in 2011

Hedge Funds in 2011

Hedge Funds Expecting Better Opportunities in 2011

Hedge fund managers are hoping that this new year will bring less macroeconomic volatility and more corporate M&A activity. Hedge funds returned 7% on average last year less than the leading stock market indices returned during the same period. Despite the disappointing 2010, hedge funds are anticipating better opportunities in 2011.
Among hedge funds, equity long/short managers – who follow the most common hedge fund strategy – averaged just 6.7 per cent, according to HFR. Investors in hedge funds expect better performance ahead.

Randall Dillard, chief investment officer at fund of funds Liongate, said that “2011 will be a good year for hedge funds, whereas last year was really not. Market volatility will probably persist, but the kind of volatility that hedge funds saw in May and June in 2010 will ­dissipate.”

Many investors anticipate event-driven funds, which focus on specific situations such as takeovers, will see a surge in inflows in 2011 as performance picks up.
“Our investment focus is less on market direction and more on opportunities that are event-driven,” said Lisa Fridman, head of European research at fund of funds Paamco. Source

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