Hedge Funds Had A Record Year In 2013

Hedge funds globally expanded assets under management by $228.8 billion to an all-time high of $2.01 trillion in 2013, according to Eurekahedge. Below are some 2013 industry highlights from the world's largest alternative investment funds research house:

• Hedge fund returns were up for the fourth consecutive month with the Eurekahedge Hedge Fund Index gaining 0.99% in December and 8.02% overall in 2013
• Total assets grew by US$228.8 billion - the fastest annual growth on record since 2007 with total assets under management of the hedge fund industry standing at a historic high of US$2.01 trillion
• Hedge fund managers attracted US$146.1 billion in the form of net capital allocations during the year - an impressive turnaround given the industry saw a total of US$109.6 billion of net asset flows in the previous three years combined
• Hedge funds focused on Asia Pacific realised the best returns and were up 15.3% in 2013 with Japan and Greater China focused hedge funds delivering the best regional results up 25.7% and 19.3% respectively.
• The Mizuho-Eurekahedge Index, an asset-weighted index, finished the year with gains of 6.63% indicating that the larger funds slightly underperformed the small and medium sized funds.
• Distressed debt hedge funds delivered the strongest performance among all strategies, gaining 16.8% in 2013, while long/short equities hedge funds were up 14.3% followed by event driven hedge funds which gained 11.3% during the year
• The Eurekahedge Fund of Funds Index was up 7.79%, marginally behind hedge funds as multi-managers posted their best performance since 2009
• Fund of hedge funds managers' are now tracking hedge funds more closely than ever with multi-managers outperforming underlying hedge funds in 6 out of the 12 months this year. A combination of reduced fees, increased diversification and the weeding out of underperforming fund of funds has rendered the multi-manager model more agile than ever.