Absolute Hedge

London, 13th May 2024 – Kepler Absolute Hedge (‘Absolute Hedge’), the market-leading research database focused on Alternative UCITS funds, has published its Market Intelligence Report for Q1 2024. The report gives Absolute Hedge’s readership base of professional allocators and UCITS fund managers a holistic view of the latest trends in the Alternative UCITS universe.

The report, produced on a quarterly basis by Kepler’s in-house research team, uses data from Absolute Hedge to shed light on how the popularity of different strategies is evolving within the allocator community, as well as tracking AUM, fund flows and performance.

Matthew Barrett, Partner and Head of Manager Research at Kepler Partners, commented, “Following a somewhat difficult period for the Alternative UCITS universe in recent quarters, green shoots are emerging and the backdrop for hedge fund strategies remains compelling. Though Q1 saw a further contraction in AUM, the pace of outflows has slowed and some strategy cohorts, including Credit, Managed Futures and Volatility Arbitrage, are growing. Q1 performance has also been strong across the industry; the AH Global Index achieved positive performance for its fifth consecutive quarter, with Managed Futures a particular bright spot.”

AUM and flows

Overall alternative UCITS industry AUM fell by $7.5bn (3%) during Q1 to $236bn. In absolute terms, redemptions were largely concentrated, with Multi Asset/Macro funds accounting for -$3.5bn (47%) of the drop and Event Driven managers accounting for -$1.7bn. Within these strategies, a handful of ‘bellwether’ funds experienced most of these outflows, with several relevant closures.

However, some strategies saw their AUM grow during Q1, including Credit, Managed Futures and Volatility Arbitrage, driven by a combination of positive performance and robust investor demand.

The market backdrop for new launches remains challenging, with relatively subdued launch activity in Q1; only three new funds came to market during the quarter.

Performance

Q1 saw a positive start to the year for Alternative UCITS performance. Buoyed by ongoing economic resilience and strong earnings releases, particularly within the technology sector, risk assets performed well during the first quarter. Absolute return strategies saw strong performance against this backdrop, with the AH Global Index returning 2.9%. This marks the index’s fifth consecutive positive quarter.

Systemic strategies stood out in performance terms with 7 of the 10 top performing funds falling into this category. Growth-oriented equity specialists were also well-positioned as they capitalised on the AI-driven rally.The AH Managed Futures Index also experienced its best Q1 performance on record (+7.9%).

On the negative side, ESG exposures were again core drivers of underperformance, while some macro managers incurred losses from wrongfooted positioning (short equities and/or long duration).

-ENDS-

Media contact
Catriona Crellin, Head of PR
catriona@keplerpartners.com
0203 887 6915

About Kepler Absolute Hedge
Absolute Hedge is Kepler Partners’ market-leading research database focused on the alternative UCITS universe. The site is designed to help professional allocators navigate this universe of funds. The database is also accessible to the managers of alternative UCITS funds and their service providers. Alongside formal strategy research, Absolute Hedge also publishes monthly performance reports and quarterly universe analysis, available free to all registered users. Kepler has been active in the alternative UCITS universe since 2009 when the sector was in its infancy, giving the firm unparalleled knowledge of the market, its managers and the investors they serve.

https://absolutehedge.com/

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Contacts

Catriona Crellin

Head of PR

Georg Reutter CFA

Head of Asset Management, Partner

Pascal Dowling

Head of Funds Marketing, Partner