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May 26, 2014 12:17 pm

Israeli Hedge Funds Outperform Foreign Funds, Industry Experiencing ‘Significant Growth’ – Survey

avatar by Joshua Levitt

Israel's 20 shekel bill. Photo: WikiCommons.

Israel's 20 shekel bill. Photo: WikiCommons.

Israel-based hedge funds grew assets by 33 percent between 2011 and 2013 and outperformed foreign funds and the local equity market, according to a survey released recently by Israel fund administrator Tzur Management.

In a statement, Tzur Management CEO Yitz Raab said, “When considering the impressive performance of Israeli hedge funds in recent years, it’s no surprise that we’re witnessing significant growth of both assets under management and the number of Israel based funds.”

A new hedge fund index, Tzur Capital Management Index of Israeli Hedge Funds (TCMI), showed that Israel outperformed the global hedge fund industry in both 2012 and 2013, with average returns of 13 per cent and 17 per cent, respectively. The Israel-focused hedge fund market has also outperformed the Tel Aviv Stock Exchange’s TA-25 Index over each of the past three years.

According to the survey, hedge fund managers in Israel are currently managing $2.7 billion. The survey, launched in 2012, now encompasses 89 fund managers, a 50 percent increase since its launch. In 2013 alone, 30 new funds came to market in Israel.

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In terms of investment strategy, 42 percent of Israeli hedge funds employ a quantitative approach, although, in assets under management, quantitative funds account for only 26 percent of the total, compared to traditional long /short equity hedge funds that make up 46 percent of total assets.

In terms of region, about 60 percent of total industry assets were invested outside of Israel.

“The data covered in our survey point to promising trend towards growth of the hedge fund industry,” Rabb said. “We are certainly looking forward to witnessing the continued success of Israeli funds.”

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