Preqin, the global leader in alternatives data and insight, today published its Hedge Funds Q3 2024: Preqin Quarterly Update report.
The report highlights that Preqin’s All Hedge Fund Index was up 3.48% (by net return) in Q3 2024, up from a 0.39% uptick in Q2 2024. APAC-focused hedge funds experienced the highest returns on a cumulative net return basis, at 6.47%, in Q3 2024 when looking at Preqin data by geographical focus. The Chinese government’s plans to stimulate the economy gave these funds a late boost in September, as equities rose. Charles McGrath, lead author of the report, notes this as a key driver of APAC-focused hedge funds seeing the highest returns, even as a selloff in tech stocks negatively impacted APAC-focused funds earlier in the quarter. North America-focused funds and Europe-focused funds returned 3.85% and 2.49% on a cumulative net basis, respectively, in Q3 2024.
Key report facts:
- Overall hedge fund returns in 2024: Preqin’s All Hedge Funds Index was up 10.02% in the first three quarters of 2024. However, this is below global equities at 19.1%, but above global investment-grade debt at 3.6%, over the same period.
- Equity strategies follow equity markets’ rally: Equity strategies overall had a net return of 4.49% in Q3 2024. Value-orientated and long-bias hedge funds had net returns of 5.58% and 5.54%, respectively, in Q3 2024 – the top performing sub strategies. Value-orientated funds saw returns increase as value equities rose ahead of growth equities, with the former being more sensitive to interest rate cuts.
- Multi-strategy funds gain further interest: Multi-strategy hedge funds had a net return of 2.94% in Q3 2024, lower than equity, event-driven and credit strategies. However, top-level strategy searches by hedge fund investors on Preqin Pro shows that multi-strategy funds are the most targeted strategy for the coming 12 months, with 57% looking to allocate to these funds, up from 50% in Q2 2024.
Charles McGrath, Associate Vice President, Research Insights at Preqin says: “Hedge funds rose with global markets in a positive, yet varied, third quarter. The long-anticipated cut by the US Federal Reserve in September capped an eventful period that included a small-cap equities rally, a brief yet jarring shock as funds rushed to exit the yen carry trade, and mixed economic data that simultaneously fueled and exorcised the specter of a US recession.”
