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.

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. Hong Kong (Hang Seng) rose 0.8%, and Shanghai Composite rose 0.3%, while Japan’s Nikkei declined 0.6%. Meanwhile, Wall Street futures are down as investors anticipate earnings week.

TASI

12,386

+0.3% (YTD: +2.9%)

MSCI Tadawul 30

1,545

+0.1% (YTD: +2.4%)

NomuC

30,896

+0.2% (YTD: -1.8%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.0% repo

4.5% reverse repo

EGX30

30,035

+0.1% (YTD: +1.0%)

ADX

9,564

+0.2% (YTD: +1.5%)

DFM

5,226

-0.4% (YTD: +1.3%)

S&P 500

6,101

-0.3% (YTD: +3.7%)

FTSE 100

8,502

-0.7% (YTD: +4.0%)

Euro Stoxx 50

5,219

0.0% (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: TADAWUL-

The TASI rose 0.3% yesterday on turnover of SAR 5.1 bn. The index is up 2.9% YTD.

In the green: Kingdom (+9.8%), Al Baha (+9.3%) and SFICO (+7.8%).

In the red: Jouf Cement (-3.6%), APC (-2.5%) and Rasan (-1.9%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.2% yesterday on turnover of SAR 53.8 mn. The index is down 1.8% YTD.

In the green: Al Waha Reit (+8.4%), SPC (+8.3%) and Al Dawliah (+7.8%).

In the red: Knowledge Tower (-10.5%), Qomel (-6.6%) and Osool and Bakheet (-6.6%)

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