By HFI Staff Writer
Last year UCITS hedge funds assets under management (AUM) increased by 20% to reach a new high of €140 billion. The latest quarterly European research on the UCITS hedge funds industry published by Alix Capital, the Geneva-based provider of the UCITS Alternatives Index (UAI) family of indices, reveals that more than half the inflows into UCITS hedge funds (56%, EUR 13.2 billion) were allocated to fixed income strategies during 2012. The next most popular investment strategy, macro, took 24.7% of flows, amounting to €5.8 billion.
Louis Zanolin, CEO of Alix Capital, commented “despite the current economic environment, the total assets managed in UCITS hedge funds continued to grow at a stronger rate than the rest of the hedge funds universe.”
“Fixed income was the most popular strategy,” he said, “and I believe this was not only money shifting from other strategies in the hedge fund space, but from long only products as well. Investors wanting exposure to fixed income are looking to absolute return funds in order to limit their risk exposure. Traditional offshore investors are also looking to UCITS vehicles for increased liquidity and to meet new regulatory constraints.” The trend through the year was for more of the flows to go to fixed income UCITS hedge fund – by the fourth quarter three out of every four Euros going into this fund format went into fixed income funds.
In 2012 the five largest fixed income funds attracted 55% of total inflows into the UCITS hedge funds sector across all strategies, and 90% of the inflows into fixed income strategies. This can be attributed to performance – some of these large funds achieved the best results in 2012, for example M&G Optimal Income – but also to investors’ preference for blue chip names, especially true for new investors coming from the long only space. The largest three fixed income advisors in UCITS hedge funds by AUM are M&G (€ 10.8 billion, up 107.3%), Pimco (€ 10.1 billion, up 74.2%) and GAM (€ 9.4 billion, up 42.4%)
Within macro strategies, BNY Mellon doubled its UCITS hedge funds AUM in 2012 to € 9.8 billion, up 94.9% over its two funds (Newton Real Return and BNY Global Real Return). This is over seven times the AUM of the second largest macro advisors, Aquila Capital, with assets of € 1.4 billion.
The largest three equity long/short advisors by AUM are Blackrock (€2.2 billion, +29.1%), Exane Asset Management (€ 2.1 billion, down 31.6%) and Man Investments (€ 1.6 billion, up 13.2%).