After two years of client withdrawals and pressure from regulators, hedge funds returned strong performances this year, fuelled by successful bets on metals and emerging markets.
The hedge fund industry, heavily criticised for gambling on the collapse of some banks in 2008, will end up the year with $2.4tn (£1.54tn) of assets under management, after adding a net $79.5bn during the past 11 months, according to HFN, a trade publication.
Insurance companies, pension funds and other institutional investors are again pouring money into the secretive industry, which is mostly based in London and New York.
Regent Fund, an investment product managed by 36 South Investment Managers, is this year's best performing fund in Europe, with a gain of 96%. The fund trades gold options – bets on the future price of gold. Gold has rallied 28% this year.
"It's a matter of getting hold of the gold rally and sticking to it," said Richard Hollington, the fund manager. "The outlook on government debt has caused the gold rally. Lower rates make people try to avoid currency depreciation."...
Elena Moya writes in The Guardian.
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