In its quarterly survey measuring hedge fund confidence, the Alternative Investment Management Association (AIMA) said that respondents reported a higher confidence levels than in the last quarter of the previous year, which continues an emerging trend over 14 quarters whereby Q1 confidence levels after Q4 lows.
As a measure of the entire population surveyed, over 85% of those polled in the first quarter had a positive confidence score. The Q1 2024 edition of the Hedge Fund Confidence Index (HFCI) surveyed approximately 180 hedge fund firms worldwide, collectively managing approximately $900 billion in assets. The results show an average confidence level of +19, an increase of three points from the previous quarter.
Tom Kehoe, global head of Research and Communications at AIMA, said in the report: “The Q1 2024 Hedge Fund Confidence Index underscores a notable resurgence in optimism within the hedge fund industry, marking a robust start to the year. Hedge fund managers, particularly smaller firms, appear more bullish about their ability to raise capital, manage costs, and generate returns for investors. Further reasons for hedge funds to be optimistic come in the shape of anticipated rate cuts and possible lesser industry regulatory headwinds as the year evolves”.
Devarshi Saksena, Partner at Simmons & Simmons, said in a statement: “Amidst a landscape of global economic transformation, it’s great to see the optimism from APAC firms who are also leading the charge in performance, capital management, and fundraising. This buoyant sentiment is echoed in the EMEA region, with UAE-based hedge funds reaching new heights of confidence, particularly following their removal from the FATF grey list. While the UK’s hedge funds navigate a more modest confidence trajectory, the global market’s bullish trends and the potential shifts in monetary policy signal a pivotal moment for hedge funds worldwide to recalibrate and thrive.”
Nicholas Miller, partner at Seward & Kissel, said in a stateement: “North American-based hedge managers are the most confident they have been in Q1 since the launch of the HFCI. In addition, smaller managers are the most confident compared to their larger peers as capital raising shows signs of improving, especially in the new launch space. The HFCI results are especially encouraging given the onslaught of recent regulations from the SEC that are proving difficult and expensive for smaller managers.”