Hedge Fund Reader : The Return of Macro Hedge Funds

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October 01, 2005

The Return of Macro Hedge Funds

There is upswing observed in the global macro hedge funds since they were banished by investors after the collapse on Long Term Capital Management (LTCM) in August 1998. After the fiasco there has been a sharp decline in the allocation of funds from more than 70 per cent of then $39 billion hedge funds market of the1990 to a current bracket of 4.5 per cent to 15 per cent in this year. However, the trend is changing this year these funds have yielded the highest risk-adjusted return ratio of 3.9 this year since 2002, compared with an industry average ratio of 2.5. With tighter regulations and stricter norms enforced by the industry and the regulators, the future seems to brighter for the beleaguered star having a checkered past. Reuters Reports:

But macro hedge funds have yielded the highest risk-adjusted return ratio of 3.9 since 2002, compared with an industry average of 2.5, Bonnefoy said. "If global macro can post another year of good returns, it will become more attractive." "We may see another 2 to 3 percent going to global macro," Bonnefoy said at the conference organised by FinanceIQ.

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October 1, 2005 in Emerging Markets, Research, Strategy | Permalink