New data from the Citco group of companies (Citco), the leading asset-servicer with $2 trillion in assets under administration (AUA), reports that hedge funds performed strongly, rallying by 2.4% in November 2024.
All in all, hedge funds administered by Citco have achieved an overall weighted average return of 13.3% in 2024 to date.
Highlights:
- Equity strategy funds led the way with a weighted average return of 3.4%. This was followed by Global Macro strategy funds at 2.6% and Multi-Strategy funds at 2%.
- Only event driven funds were negative, with a weighted average return of -0.4%.
- Asset under administration categories returned to positivity, with an overall weighted average return of 2.4%. Larger funds, with over 3B (2.6%) and 1B-3B (2.5%) the best performers.
- Over three quarters (76.8%) of funds achieved positive returns, an improvement on around half the previous month.
- Rate of return spread showed greater disparity as difference between 90th and 10th percentile fund returns widened to 9.5%, from 8.2% in October.
- Hedge funds saw net inflows of $0.5 billion in November. There were strong subscriptions of $8.6 billion compared to $8.1 billion in redemptions.
- Monthly Treasury payment volumes dipped from the record high in October with 49,371 treasury payments, down from over 55,000 in October.
- Regional capital flow: Funds in Europe ($0.8B) and Asia ($0.1B) both saw positive net inflows in November; with a net outflow of $0.4B in the Americas.
Executive Summary
Performance
Hedge funds put on one of their strongest showings of 2024 in the penultimate month of the year, leaving them on track to match last year's double-digit return overall.
Hedge funds administered by the Citco group of companies (Citco) saw an overall weighted average return of 2.4% in November, bouncing back from the dip in October, to take the year-to-date (YTD) overall weighted average return to 13.3%.
Equity strategies were the top performing category of funds in November, with a weighted average return of 3.4%, making it seven straight months of positive returns.
Next were Global Macro strategies which achieved a weighted average return of 2.6%, followed by Multi-Strategy at 2%, and Fixed Income Arbitrage at 0.7%, while Commodities strategies came in at 0.3%.
Only Event Driven funds were negative in November, with a weighted average return of -0.4%.
The assets under administration (AUA) categories got back to winning ways in November, with positive returns across the board.
The largest funds with more than $3B of AUA were the top performers, with a weighted average return of 2.6%, followed by funds with between $1-3B of AUA at 2.5%. Next were funds with between $500M-$1B of AUA, at 1.9%, then the smallest funds with less than $200M of AUA which came in at 1.7%. Rounding off the group, the $200M-$500M of AUA category achieved a weighted average return of 1.5%.
Having seen only half of all funds achieving positive returns the previous month, November saw this number jump to over three quarters (76.8%).
Meanwhile, the rate of return spread – the difference between the 90th and 10th percentile fund returns – widened further to 9.5%, up from 8.2% in October, showing a greater disparity of returns.
Capital Flows
Hedge funds saw small net inflows in November to leave them on course for a positive 2024 in terms of overall flows.
Subscriptions of $8.6B were ahead of redemptions of $8.1B, to give overall net inflows of $0.5B. In total, funds have seen $4.7B of net inflows YTD to end of November.
There was divergence across strategies in November; Funds of Funds had the highest net inflows, at $0.6B, followed by Arbitrage and Hybrid strategies at $0.3B. Emerging Markets and Event Driven were both flat, while Multi-Strategy funds had net outflows of $0.1B, and Equity strategies saw net outflows of $0.2B. Global Macro saw the highest net outflows, at $0.4B.
On a YTD basis, Hybrid and Multi-Strategy funds have been the most popular, with net inflows of $13.7B and $5.7B respectively, while Equity strategies have seen the highest net outflows, at $10.6B, amid a backdrop of strong returns from major equity markets around the world.
On an Assets under Administration (AUA) basis, funds with between $5B-$10B of AUA had the highest net inflows for November, at $0.5B, followed by the $1B-$5B of AUA category at $0.1B. The smallest funds with less than $1B of AUA once again had muted net outflows, this time at $0.1B, while the largest funds with more than $10B of AUA were flat.
Looking YTD, the majority of AUA categories are positive, with funds with between $1B-$5B of AUA and $5B-$10B of AUA seeing net inflows of $6.9B and $6.4B respectively, and the largest funds seeing net inflows of $2.2B. Only the smallest funds have seen net outflows, standing at $10.8B so far in 2024.
Funds in the Americas saw net outflows of $0.4B in November, while Asia had net inflows of $0.1B, and Europe had net inflows of $0.8B.
Citco Grows Asia Pacific Presence With New Japan Office
Citco has announced the launch of Citco Japan Co KK. This new entity in Japan underscores Citco's commitment to the Asia- Pacific region and bolsters its global offering to both current and prospective clients.
Citco Japan Co KK is situated in Grantokyo South Tower 11F, 1-9-2 Marunouchi Chiyoda-ku, Tokyo, 100-6611, Japan, and will operate as Citco's local operational headquarters in the region. The team will offer fund accounting, fund operations and Special Purpose Vehicle (SPV) administration services, with an overarching focus centred on automation to further enhance scalability and growth via its industry leading expertise and proprietary technology.
Performance
See the full report here.
About the Citco group of companies (Citco)
The Citco group of companies (Citco) is a network of independent companies worldwide. These companies are leading providers of asset-servicing solutions to the global alternative investment industry. With $2 trillion in assets under administration and operations spanning across 36 countries, Citco’s unique culture of innovation and client-driven solutions have provided Citco’s clients with a trusted partner for more than four decades.
