Hedge funds’ assets under management (AUM) hit USD 4.5 tn in 2024, rising 9.8% y-o-y, Reuters reports citing HFR. This USD 401.4 bn increase — the highest since 2021 — was largely driven by robust performance across various strategies, despite a challenging investment environment.

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More money in: Hedge funds attracted USD 10.47 bn in net inflows in 2024, marking the first annual positive net flow since 2021, although 4Q saw USD 12.6 bn in outflows. AUM have grown by 56% since 2015, with the increase coming mostly on the back of fund performance rather than new inflows as the industry struggled to lure in new money from investors. Meanwhile, outflows exceeded inflows by USD 166.8 bn over the past decade.

How were the returns? Funds delivered a 9.83% average return in 2024, with positive outcomes across equity, macro, event-driven, and relative value strategies, according to data from the HFRI Fund Weighted Composite index, cited by Reuters. However, the average return dwarves that of the S&P 500 during the same period, standing at 23.3%.

Investors are more interested now: A Bank of America survey of 256 firms managing over USD 1 tn in hedge fund assets showed that half of investors plan to increase allocations this year, up 2% from early 2024, while 37% will not make changes, Reuters reported separately. Investors withdrawing completely from hedge funds dropped to 7% in 2024, compared to 12% in 2023, with dissatisfaction mainly tied to underperformance (73%) and concerns over changes to investment strategies or portfolio simplification.

Looking ahead: “Total global hedge fund industry capital rose to a fifth consecutive quarterly record as managers, institutions, and investors positioned for sweeping policy changes which are likely to have significant and far-reaching implications for US and global financial market structure, regulation and capital,” HFR President Kenneth J. Heinz told Reuters.

MARKETS THIS MORNING-

Asian markets were mostly in the green this morning after China published its PMI data. Hang Seng (Hong Kong) rose 0.8%, and Shanghai Composite rose 0.3%, while Japan’s Nikkei declined 0.6%. Meanwhile, Wall Street futures declined as investors anticipate earnings week.

EGX30

30,035

+0.1% (YTD: +1.0%)

USD (CBE)

Buy 50.19

Sell 50.32

USD (CIB)

Buy 50.21

Sell 50.31

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

12,386

+0.3% (YTD: +2.9%)

ADX

9564

+0.2% (YTD: +1.5%)

DFM

5226

-0.4% (YTD: +1.3%)

S&P 500

6101

-0.3% (YTD: +3.7%)

FTSE 100

8502

-0.7% (YTD: +4.0%)

Euro Stoxx 50

5219

+0.04% (YTD: +6.6%)

Brent crude

USD 78.50

+0.3%

Natural gas (Nymex)

USD 4.03

+2.1%

Gold

USD 2,806.60

+0.5%

BTC

USD 104,415.50

-0.7% (YTD: +11.7%)

THE CLOSING BELL-

The EGX30 rose 0.1% at yesterday’s close on turnover of EGP 3.5 bn (7.7% below the 90-day average). Egyptian investors were the sole net buyers. The index is up 1.0% YTD.

In the green: AMOC (+7.4%), Elsewedy Electric (+2.9%), and Juhayna (+2.6%).

In the red: B Investments (-3.2%), Palm Hills Developments (-2.6%), and Eastern Company (-2.1%).

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