Event driven hedge funds have outperformed other strategies in May 2013, posting net returns of 2.10 percent, bringing the year to date performance to 7.60 percent, according to research house Preqin.
Event-driven investing is an investing strategy that seeks to exploit pricing inefficiencies that may occur before or after a corporate event, such as a bankruptcy, merger, acquisition or spinoff. Data from the firm’s Hedge Fund Spotlight shows that the overall 2013 performance of such funds were above that of long/short funds, which have posted returns of 5.39 percent so far in 2013 and 0.75 percent in May.
Hedge Funds Focusing on Asia-Pacific
Hedge funds focusing on Asia-Pacific markets continued to perform strongly this month, generating a year-to-date return of 9.38 percent, which is currently outperforming the benchmark for all hedge funds (YTD of 4.63 percent). Other funds also posted positive returns this month with the exception of CTAs, which saw a loss of 1.82 percent.
Joe Childs, manager at Hedge Fund Performance, says: “Hedge funds posted positive returns across all strategies and regions this month with event-driven strategies, in particular, contributing a healthy return of 2.10 percent for May. Hedge funds focusing on Asia-Pacific markets posted a return of just 0.29 percent in May, the lowest for ten months. However, funds targeting the region have generated a year-to-date return of 9.38 percent and continue to outperform the benchmark for all hedge funds (2013 YTD of 4.63 percent). Other funds also posted positive returns this month with the exception of CTAs, which saw a loss of 1.82 percent.”
Other Key Facts
- Long/short funds of funds are outperforming the direct long/short industry, posting returns of 1.74% in May and 6.51% in 2013 YTD.
- CTA performance has been volatile in the first two months of Q2 2013; in May CTAs posted -1.82%, compared to positive returns of 0.98% in April.
- Macro funds continue to underperform, returning just 0.13% in May, taking total performance in 2013 YTD to 2.15%.
- Europe was the top-performing region in May, with vehicles posting 1.61%. Asia-Pacific-focused vehicles had their worst month of the year so far, posting just 0.29% in May, compared to 2.51% in April.
Monthly Hedge Funds Performance
While hedge funds, funds of hedge funds, and UCITS hedge funds have generally posted positive returns since the middle of last year, the performance of CTAs and managed futures funds have been more volatile. After outperforming other fund types last month, losses posted by CTAs in May brought the cumulative return for the last 12 months to -2.64 percent.