2010 Key Trends in Latin American Hedge Funds

Eurekahedge
March 2011

Introduction

The Latin American hedge fund sector is one of the fast growing segments of the global hedge fund
industry. Over the last decade, the total number of hedge funds in the region has increased four-fold
while the assets under management has grown by nearly 25 times. Currently, the size of the Latin
American hedge fund industry stands at US$60 billion.

Industry assets witnessed incremental growth in the 2004–2007 period, registering a three-fold
increase over these three years. This tremendous growth was underscored by the performance of the
Eurekahedge Latin American Hedge Fund Index, which gained 103.23% over the period. The industry
witnessed a downturn during the credit crunch and the subsequent financial crisis; however,
managers delivered admirable downturn protection throughout this period with an average loss of only
4.93% at a time when the average global hedge fund was down 10.78%. Assets under management
fell to US$39.3 billion by March 2009 before posting a strong recovery in the last three quarters of
2009.

Figure 1 shows the growth in the Latin American hedge fund industry since 2000.

Figure 1a: Industry growth over the years

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 Figure 1b: AuM growth in recent months

Throughout 2010, Latin American hedge funds maintained the trend of growth established in the last
three quarters – the Eurekahedge Latin American Hedge Fund Index delivered a gain of 9.84% in
2010. As at December 2010, industry assets stood at a historical high of US$60 billion, which
represents a 52.7% increase since March 2009. While most of the growth was generated through…

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