The Australian Securities and Investments Commission (ASIC) released a report of the Australian hedge funds sector for the year 2014, comprising of 27 qualified funds holding around 44% single-manager funds in the country.
The Australia’s survey confirmed as the previous one from 2012, that hedge funds do not pose any significant systemic risk to the sector. ASIC shows an increase in exchange-traded derivatives in the industry, showing a 72% acceleration of trading volume from the previous report (2012), where the increase reached 56%.
Nevertheless, we have to take in account, that hedge funds are only small portion of Australia’s managed funds sector, reaching together $2,407 billion. Single-manager hedge funds make together $83.7 billion, while hedge funds’ equity makes $12.2 billion (3.5 and 0.5% respectively).
The Australia’s median gross leverage ratio reached twice that much as NAV in 2014, while in 2012 it made only 1.7 times NAV, what is considered as safer leverage, much lower as in most of other countries. Retail direct investors’ portion of NAV investors reached 17% and approximately 49% of investors accessed hedge funds via an IDPS.
High exposure to interest rate derivatives has been reported by Australia’s hedge funds, with a gross exposure of over $64 billion as of September 30, 2014. The largest exposure was connected to North America, making 29% of NAV investments there. Australia and Asia exposure reached 26% of the entire NAV.
As for asset classes, listed equities of the hedge funds reached the net investment value of more than $26.3 billion, being the largest exposures of surveyed managers (second one, cash, reaching only $5.7 billion) in Australia.
Over the year to September 30, 2014, hedge funds reported net applications of $5.1 billion, making $10 billion in applications and $4.9 billion in redemptions. The median net applications were positive during every month of the surveyed year.
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