Hedge fund managers are continuing to stay positive about their firms’ economic prospects heading into the final quarter of the year, according to a new report from the Alternative Investment Management Association.

The increased confidence was felt across almost all fund sizes, regions and individual firms, according to the survey, which sampled over 300 managers worldwide.

AIMA pointed to several factors, including strong industry returns and positive net inflows, as the reasons for the positivity.

Managers in the UK, Europe and Asia were more confident in their business prospects than they were last quarter. UK managers were particularly optimistic versus their regional peers, especially among UK funds with over $1bn AUM, which reported confidence levels of +22.3.

In the US, however, confidence dropped slightly when compared with Q2 numbers — the results fell, on average, by approximately two points to +20.4. The report pointed to the COVID-19 Delta variant’s effect on the US economy, but noted that the “overall impression is that this is a temporary setback with travel expected to recover strongly over the next quarter.”

The report also pointed out several risk factors that could dampen the positive mood moving forward, including increased regulatory scrutiny worldwide, talent management issues and operational hurdles.

In total, the group surveyed accounts for approximately $1.6 trn in assets under management. The quarterly survey was first conducted in Q4 2020.

Photo by Josh Rose on Unsplash