GLOBAL HEDGE FUNDS TRIUMPH: BRIDGEWATER AND TWO SIGMA
US global hedge funds outperformed their local counterparts in the Chinese markets last year. Bridgewater China Investment Management, the Chinese section of the world’s largest hedge fund, quadrupled its assets under management to more than $5.6bn at the end of 2023 compared with two years ago. Two Sigma China almost doubled its assets over the same period.
This comes as Chinese markets have been very turbulent and challenging over the previous year, however global hedge funds (such as those mentioned above) reported double-digit returns whilst local asset managers struggled. Bridgewater’s All Weather Strategy China Private Investment Fund yielded 10.2%, and Two Sigma’s three China funds reported a more than 16% return in the same period. In contrast, the benchmark CSI 300 index fell 11.7% in 2023. Furthermore, local investment firms in China struggled to emulate the success of global hedge funds, with an average return of 2.8% for 771 locally owned multi-strategy hedge funds.
This outperformance of funds such as Bridgewater and Two Sigma in the Chinese market highlights the potential to profit from the world’s second-largest economy despite its slower growth outlook and geopolitical tensions between Beijing and western capitals.
Analysts suggest that certain funds with significant resources and an aggressive approach can find opportunities in the Chinese market, but it doesn’t guarantee success for other funds with different approaches. This would suggest that having access to all funds provides the best opportunity to optimise returns.
The above is for educational purposes only and does not constitute advice. You should always contact your advisor for a personal consultation.
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