The mood entering 2014 was buoyant, following two back-to-back years of double digit returns in 2013 and 2012. Both fund managers and investors alike told Preqin, as part of our end of year interviews for the 2014 Preqin Global Hedge Fund Report, that they were more positive about the outlook for the industry in 2014 than they were for 2013. Investor sentiment was looking particularly rosy as performance of hedge funds in 2013 met or exceeded expectations for the majority of investors.
However, the fi rst quarter of 2014 has been one of mixed results. January and March returns were both in the red, with only February’s benchmark performance of 1.76% keeping performance for hedge funds in positive territory for the quarter. Event driven strategies funds continue to post impressive returns, adding 2.77% in Q1 2014, making it the best performing strategy tracked by Preqin’s Hedge Fund Analyst. Investors are responding to this prolonged period of strong performance of event driven funds with more investors willing to take on the illiquidity premium of investing in these strategies in Q1 2014 than in Q4 2013.
Source : Preqin