Event-driven hedge funds have edged up following the US election according to the Lyxor Alternative Investment Industry Barometer.
Lyxor reported that merger arbitrage and special situations strategies produced positive returns for November 2016, up 0.7% and 0.5% respectively. Overall, though, the Luxor hedge fund index was very slightly down, by 0.2% for the month. Jean Baptiste Berthon, Senior cross-asset strategist at Lyxor Asset Management. said: “The unexpected election of Mr Trump is strengthening the case for an inflection in yields and inflation. Heading into 2017, we expect less monetary support and more fiscal push to make active managers’ life easier. On the one hand higher rates and inflation could result in more fundamental pricing, supporting more typical asset relationships. On the other hand, Trump’s key proposals open various sector themes likely to foster asset dispersion. This environment should put an end to a year and a half of anemic alpha generation.”