According to Hedge Fund Research, Inc, which specializes in the indexation and analysis of hedge funds, total hedge fund capital invested in emerging markets rose to $175.6 Billion, a seventh consecutive quarterly record, as inflows into Emerging Asia, Middle East and Multi-EM offset performance based asset declines in Russia and Latin America. The HFRI EM: Russia/Eastern Europe Index has fallen -9.7% YTD through April, the worst decline since the Index lost -10.5% in May 2012 with Kenneth J. Heinz, the President of HFR, commenting:
“Investors in Emerging Markets hedge funds typically have a tolerance for volatility and expectation of high returns; those investing in funds focusing on exposure to Russia and Eastern Europe categorically have the highest tolerance for volatility, which was imperative through the 1st quarter in which the political, secular and economic uncertainty associated with Russian capital markets and Ukraine reached extreme levels. Historically, sharp drawdowns in EM and Russian exposure are typically followed by strong performance recoveries. Since the May 1994 inception of the HFRI Russia/E. Europe Index has gained nearly 14 percent annualized, over 400 bps per year better than equity markets or the broad based hedge fund industry, and investors which are able to maintain or increase exposure through characteristic EM drawdowns should expect a strong recovery over the intermediate timeframe.”
To read the whole press release, Russian Hedge Funds Post Steep Losses on Ukraine Crisis, go to the website of Hedge Fund Research, Inc.
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