This rise mainly reflects a net inflow of EUR 1.5 billion that came largely from institutional investors (such as pension funds), who invested notably in Dutch hedge funds that were set up by pension fund managers a few years ago (note 1). These hedge funds – with net assets totalling around EUR 16.6 billion – do not actively pursue an investment strategy, but mainly invest in other hedge funds (known as funds of hedge funds).
Total net assets of Dutch hedge funds increase again
- Statistical News Release
Date 24 August 2012
Dutch hedge funds' total net assets increased from EUR 17.5 billion at end-2011 to EUR 19.8 billion in the second quarter of 2012 (see Figure 1).
Dutch hedge funds rank second in the euro area, after Ireland (EUR 76.7 billion). The volume of total net assets of hedge funds in the large euro area countries such as France (EUR 2.7 billion) and Germany (EUR 1.6 billion) is relatively moderate (see Figure 2). Hedge funds are principally established in offshore locations (such as the Cayman Islands, Bermuda etc.), but are generally managed from the United States and the United Kingdom.
Hedge funds worldwide realised a negative return in the second quarter of 2012 owing to price declines and unrest in the equity markets. The HFRI Fund Weighted Composite Index (measured in US dollars) – a commonly used benchmark – fell by 2.8% quarter-on-quarter in the second quarter of 2012 (Figure 3). Funds of hedge funds also recorded a negative return in the second quarter (-2.3% QoQ). However, Dutch hedge funds realised a positive total return of 4.1% QoQ in this period. The appreciation of the US dollar against the euro (5.7% QoQ) played a significant role, as a significant share of Dutch funds' assets is invested in US hedge funds.
Note 2: This distribution is calculated using data from the twenty largest Dutch hedge funds with a joint market share of around 90%. There might therefore be smaller Dutch hedge funds with a different investment strategy.
Note 3: According to data from Hedge Fund Research.
Note 4: According to data from TheCityUK Research.