News May 9, 2017

Hedge Fund View: European divorce

The quarterly report highlights the current market environment and second quarter outlook providing our house view and hedge fund strategy forecasts.

Of particular focus in this edition is the continued and ongoing fallout of the UK and EU divorce, while the US demonstrated divisions in the ruling Republican party raising questions about the efficacy of Trump’s administration to pass legislation. Despite this, investors have taken solace from the encouraging macroeconomic data from both sides of the Atlantic.

This more positive economic growth outlook largely led by the US comes at a time when inflationary pressures appear to be building, driven, the report suggests, by both domestic labor market tightening and potentially higher oil prices.

"We feel that the outlook for hedge fund returns is indeed improving driven by divergent monetary policies, greater uncertainty and the re-emergence of inflation in the world’s largest economies," note the authors of the report.

Below is a visual summary of the key forecasts for each hedge fund strategy.

Key forecasts for each hedge fund strategy.

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