Hedge-fund assets increased by $7.8 billion in October, according to Bloomberg News. This marks a sixth straight month of increases. With inflows of $10.2 billion in inflows and now around $1.45 trillion under management the hedge fund industry seems to be recovering from its disastrous 2008 year which saw around 150 funds closing shop. The industry has seen 140 new funds open up this year.
Europe and Asia (with the exception of Japan) posted the increases as foreign investors have been piling back into the hedge-funds. Europe in particular has seen close to $4 billion of increases for the past three months with around $340 billion now under management.
What might these trends indicate for the future of the industry?
For now the answer seems to be clear, investors will continue to pay for performance. With hedge funds significantly outpacing the broader markets this year it makes sense many investors are shifting their assets out of equities and into hedge funds. While the 140 new funds this year is partially due to replacing the funds that went belly-up a year ago the environment still seems considerably strong for new fund openings as the cash continues to flow in. The relatively large increases in European fund assets could also indicate a recovering European economy as well as a greater interest in hedge funds in Europe. Overall, the past six months have shown that the industry is alive and well and that as long as funds continue to outpace the markets, they can expect more inflows to come their way.
Sunday, November 22, 2009
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I do not believe that the recent jobs report is anything at all to get excited about. If you take a deeper look into the recent data you will find that much of the increase in employment was temporary employment during the last couple of months of the year. I believe that much of the current employment problems stem from a lack of real wealth creating companies. Untill the country gets away from all the jobs in the financial service sector. I believe that the unemployment situation will not improve. Jim Rogers has stated this in many of the interviews that he has given to the news media that the financial services sector is much to large. Jim Rogers also believes that the savings rate must be much higher if we are to sustain any high degree of economic growth. Many retailers can make more money loaning money to their customers at 20% interest than they can make selling product to their customers. What does that tell you about jobs.
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