Goldman Sachs Report: Hedge Funds Shine in 2024 Despite Market Challenges
In a recent report by Goldman Sachs, hedge funds have shown their best performance since 2021, with an average return of 5.7% in the first half of 2024. This marks a significant improvement compared to the full-year return of 7.1% in 2023.
The survey of 314 hedge fund allocators managing over $1.2 trillion in assets revealed a positive sentiment towards hedge funds. Institutional investors, private capital, and funds of funds have shown renewed interest in this asset class.
Various hedge fund strategies have performed well, with equity long/short (L/S) strategies leading the pack with an average return of 7.6%. Quantitative strategies also did well, with a return of 7.0%.
Family offices, endowments, foundations, and sovereign wealth funds saw the strongest performance, largely due to their exposure to equity L/S strategies. Allocators reported an average gain of 6.7% in their hedge fund portfolios in the first half of the year.
Looking ahead, the net proportion of allocators planning to increase their exposure to hedge funds has reached a record high. Hedge funds are now the most popular asset class, with 41% of allocators intending to increase their exposure.
In conclusion, hedge funds have shown strong performance in 2024 despite market challenges. Investors are increasingly turning to hedge funds as a sought-after asset class, and the positive sentiment towards them is expected to continue in the latter half of the year. This trend could potentially benefit investors looking to diversify their portfolios and achieve higher returns in a challenging market environment.