There has been a definite wave of optimistic records for hedge funds. In particular – according to a recent CNBC report – this has been the case for macro strategies. In the first month of the year they pulled in $6.87 billion. Long/short equity funds have likewise had a good time with $4.16 billion being pulled in the same month.
Having said that, when we look at 2016 in comparison, the news might not be quite as celebratory. The amount pulled then was a staggering $111.64 billion. Nonetheless, as we are now finally witnessing an improvement in performance. As such investors are returning to hedge funds with $14 billion being pulled in January of this year which is half the amount for the entire 2017. And that’s significant especially since such a substantial escalation has not happened since January of 2014!
So for those pleased with this news and looking to start a hedge fund investment career, what should they look out for? According to a recent analysis by Tabby Kinder in Financial News London, we have learned that the “small, nimble funds” are the way to go as they can “deliver higher returns…because they are able to trade less liquid stocks than some of their more established peers.” However, it is not as simple as that since small funds have a harder time “absorbing huge sums of capital [which] has kept them out of reach of many large institutional investors.”
Hopefully though – if the banking and investing experts are to be believed – this is changing, slowly.