Average hedge fund management fees dropped to 1.33% last year from 1.6% in 2015, as the 1,057 fund closures in 2016 were the most since the financial crisis, according to Hedge Fund Research. "Continuation of the process of macroeconomic normalization is likely to drive strong performance across a wide range of strategies in 2017," said HFR President Kenneth Heinz.
Non-equity-based approaches were in place for 35% of hedge funds that opened last year, compared with 20% in 2015, according to a study by the Seward & Kissel law firm. More non-equity-based funds introduced last year offered investors a "founders" class, while a decreased percentage of equity funds did so.
Smaller hedge funds focusing on niche markets are showing a stronger ability to thrive amid pressure over the industry's fees, according to a Barclays Prime Services Capital Solutions Group report. Institutional allocations went to 38% of hedge funds with less than $500 million from 2014 to 2016, compared with 11% from 2010 to 2013.
5 Reasons ETFs Impact Stocks Less Than You Think ETFs trade almost $80bn each day—approximately 29% of all stock trading by value. As a result, they are often accused of contributing to volatility and correlation (among other things). We highlight 5 reasons why these fears may be exaggerated.
Funds sponsored by asset managers are going to come under close scrutiny from the Financial Stability Board, said Chairman Mark Carney. The FSB is looking at what funds can do to manage the risk of being hit by runs in times of market stress.
Clearstream Holding is calling for full market integration of the European Central Bank's TARGET2-Securities, the pan-European securities settlement system. "This is the only way how T2S can live up to its original promise: to make cross-border settlement easier and more efficient for market participants," says Clearstream CEO Marc Robert-Nicoud.
President Donald Trump's nominee to be chairman of the Commodity Futures Trading Commission, J. Christopher Giancarlo, said that he hopes to be able to put forward balanced regulations that sustain a vibrant market. Giancarlo also discussed the budget, the current state of the clearing ecosystem, and how the CFTC plans to go about re-evaluating current regulations.
Europe's revised Markets in Financial Instruments Directive's rules mandating the unbundling of research is causing a "cultural, technological and operational shift" within the industry, says Celent research analyst John Dwyer. "The buy-side has been swimming in free research for so long -- they have no idea how much they use and what value it is," says Dwyer.
AIMA, in conjunction with Global Prime Partners, the prime brokerage boutique, is conducting a survey about the next generation of alternative investment managers -- defined as firms running less than $500 million in assets under management. The online questionnaire will help AIMA to understand better how these managers operate their business and position themselves for retaining and attracting capital, and the responses will form part of a wider report to be published in the summer. The survey opened Feb. 28 and is scheduled to close April 30.
AIMA has opened registration for its flagship annual regulatory event, AIMA Global Policy & Regulatory Forum 2017, which will be held in Paris on April 4. With confirmed speakers from the EC, ESMA, AMF, FINMA, IOSCO and others, the event will provide a clear view of the policy themes that will affect the alternative investment industry in the coming years. The event, which is free to AIMA members, will also address supervisory priorities and investor expectations, as well as provide peer-networking opportunities. Discounts on Eurostar travel and hotel accommodation are available to attendees. Learn more or register.