Emerging markets hedge funds enjoy flying start to 2012, says Hedge Fund Research

30 May, 2012

Emerging market-focused hedge funds had their strongest start to a calendar year since 2006 gaining 7.3% in the first quarter, according to data from the Chicago-based Hedge Fund Research.

Total capital invested in emerging markets hedge funds soared to a record $127.3 billion at the end of the quarter, an increase of almost $10 billion since December 2011.

This increase in capital was driven by performance-based gains as net new capital flows from investors remained muted with funds experiencing inflows of $3.1 billion. Outflows, however, totaled $3.4 billion.

The majority of these inflows were concentrated in Emerging Asia and Russia/Eastern Europe, which attracted roughly $500 million. Emerging Asia and Russia/Eastern Europe have enjoyed a substantial turnaround in 2012 gaining 6.7% and 7.63% respectively, having suffered double digit negative declines in 2011.

The number of emerging markets hedge funds continued to rise with 1,059 funds globally, eclipsing the previous 2007 record of 1,046.

Nearly half of these funds invest primarily in Emerging Asia, followed by 20% in the Middle East and North Africa (MENA), Russia/Eastern Europe (15%) and Latin America (10%).

emerging marketsHedge Fund Research