TORONTO (Reuters) – Global hedge funds posted average returns last year of 11.6%, the best year for the industry since 2009, as they took advantage of market volatility due to the pandemic, according to data from industry tracker Hedge Fund Research (HFR).<\/p>\n
Hedge fund assets rose to $3.6 trillion at the end of 2020 after adding another $290 billion in the final three months of the year, according to the data.<\/p>\n
Firms managing more than $5 billion added $4.8 billion of investor cash between them in the fourth quarter while firms managing less than $5 billion were hit with net outflows.<\/p>\n
Stock-picking hedge funds made gains of 17.4% last year while strategies that focused on mergers and acquisitions landed returns of 8.8% and those that bet on macroeconomic events made 5.3%, the data showed.<\/p>\n
\u201cInstitutions globally are making forward-looking allocations to hedge funds, anticipating and positioning for the near-term uncertainty of the virus containment, as well as intermediate-term macroeconomic uncertainties of the U.S., European and Asian economies into 2021,\u201d Kenneth J. Heinz, President of HFR, said in the release.<\/p>\n
While hedge funds enjoyed strong performance during 2020, an index tracking the S&P 500 would have gained 18.4% over the same time period, HFR said.<\/p>\n