In Q4 2013, the alternative UCITS sector grew by 21 percent compared to Q4 2012, showing continued demand and investment in alternative strategies, according to the Alceda Quarterly UCITS Review. Strong equity markets, rallying into the year end, supported the demand for Alternative UCITS strategies and drove the Q4 performance up 2.7 percent, bringing year to date gains to 6 percent.
“The universe saw Assets under Management grow by over EUR 25 billion over 2013, translating to a growth rate of 21 percent. With investor confidence growing, and more funds being driven into Alternative UCITS strategies, as well as a supportive regulatory environment, we expect this positive trend to continue into 2014”, said Michael Sanders, Chairman of the Board, Alceda FundManagement S.A.
Tracking the Absolute Hedge Alternative UCITS Index, which encompasses 468 funds, assets under management reached a total of EUR 159.4 billion, an increase in AUM of 3.2 percent on the previous quarter. As equity markets continued their strong performance in the last quarter of the year, the AH Equity Long Short Index kept its position as the top performing strategy in the year with a 12.3 percent increase over 2013, following the 4.3 percent uplift in Q4 2013.
In addition, AUM within Equity Long Short reached EUR 18.4 billion, registering a 17.2 percent increase over the quarter. FX strategies were hard hit with both gains and assets declining 15.4 percent and 33.3 percent, respectively, in Q4 2013, leading to an overall decline in performance of 1.3 percent in 2013. Managed Futures funds, which declined 2.4 percent in Q3 2013, rebounded in the last quarter adding 6.1%, making it the best performing category in the quarter; however AUM declined 3.2 percent over the quarter showing the strategy is still facing some challenges.
Macro funds control the largest share of total AUM with EUR 42.4 billion invested, with assets growing by 6 percent over Q4 2013. The AH Macro Index advanced 1.4 percent in Q4 2013 and 2.3 percent over the year. Q4 2013 was a particularly active quarter with regards new alternative UCITS launches, with 17 new funds across strategies coming to market, primarily within the Equity Long Short and Credit Indices. The AH Credit Index ended the year with gains up 3.37 percent (+1.23 percent in Q4 2013) as investors reacted to the dislocation of bond markets. In line the new issues across strategies, the report reveals that investors are increasingly happy to support new products with new funds achieving significantly higher launch assets, often within their first year.
“The results of the Alceda UCITS Review in Q4 2013, and over the full year, demonstrate the growing investor confidence in the global economic recovery and the continued demand for alternative UCITS strategies. While the overall results were encouraging, there was a significant dispersion in performance between the best and worst performing funds in the space. Equity Long Short, the strongest performing category over the year, outperformed FX strategies by over 60 percent, demonstrating the importance of good fund selection and portfolio diversification. Assuming equity markets continue to rally, we expect Equity Long Short funds to benefit and maintain their levels of performance", according to Sanders.
Alceda es una firma independiente europea especializada en estructurar inversiones tradicionales y alternativas. Alceda ofrece a gestores de activos y fondos, bancos y family offices soluciones de inversión a la medida y acceso global a inversores y socios de distribución. Fundada en 2007, Alceda está presente en cuatro países, con oficinas en Luxemburgo, Hamburgo, Londres y Hong Kong y cuenta con más de 60 empleados en todo el mundo. A fecha de hoy cuenta con más de 7.000 millones de dólares en activos bajo administración en distintos productos.