Banking

Hedge fund confidence continues to grow globally despite Delta variant

According to the Alternative Investment Management Association’s (AIMA) Global Hedge Fund Confidence Index, managers’ belief in their prospects continue to grow, up to a score of +20.4 9on a -50 to +50 scale), an increase on the second quarter results.

UK hedge fund managers’ confidence levels up 60% since Q4 2020

Managers in EMEA, the UK and Asia Pacific all displayed a greater confidence than Q2, with only the US results falling slightly on Delta variant concerns, although this is generally viewed as a “temporary setback with travel expected to recover strongly”.

Steve Nadel, partner at Seward & Kissel, said: “There have been new challenges that have arisen from COVID variants and the political climate in the US and thus it is slightly unsurprising that North America based managers are less optimistic about the next twelve months than they were last quarter, however, NA managers are overall still optimistic.”

The UK was the most positive on average, with a score of 21.3, followed by EMEA and North America, which remains more confident of its economic prospects than Asia Pacific despite the slight decline.

Devarshi Saksena, partner at Simmons & Simmons, said: “The marked increase in confidence over the last year amongst UK hedge fund managers is great to see – and is reflected in the work we have been doing for our UK headquartered clients.

“Our established clients have been very active creating new products across the full range of strategies and the new start-up manager market continues to see strong levels of activity and growth.”

One-third of investors set to boost hedge fund allocations in H2

Tom Kehoe, global head of research and communications at AIMA, added: “Prospects for the hedge fund industry are as strong as they have been in many years, underpinned by solid industry performance and renewed investor interest.

“Despite several industry headwinds including COVID variants, increased regulatory scrutiny as well as operational challenges for the industry to consider, hedge funds globally remain cautiously optimistic regarding the economic prospects of their business over the coming 12 months.”

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