Eurekahedge Unveils Index Tracking Top 50 Hedge Funds

Apr 27 2015 | 4:46am ET

Eurekahedge, an alternative fund data and research house has unveiled a new index that tracks the world’s 50 most successful hedge funds.

The index, Eurekahedge 50, has been created in partnership with Markov Processes International, a provider of quantitative tools and technologies for analysing investment performance and risk. 

According to Eurekahedge and Markov Processes, the index was created to meet the demands of institutional hedge fund investors seeking a more selective benchmark reflective of diversified institutional quality hedge fund portfolios. The Eurekahedge 50 tracks the returns of the top hedge funds based on longevity, assets under management and quality of risk-adjusted returns, taking into account stability and consistency.

Boasting attractive performance coupled with a low downside deviation, the Eurekahedge 50 contains household names such as Paulson, BlueCrest, Cerberus, Fortress, Renaissance Technologies and other distinguished advisors from the hedge fund industry. Membership to the index is limited to one fund per management company.

“As investing in hedge funds continues to mature, institutional investors have been looking for a benchmark that is more reflective of their investment objectives as opposed to broad all-inclusive hedge fund indices. With a well-defined index construction criteria and attractive performance characteristics of the Eurekahedge 50, we feel we have created such an index and are excited to offer our clients access to this industry-leading hedge fund portfolio benchmark,” said Alexander Mearns, CEO of Eurekahedge.

The Eurekahedge 50 is equally weighted among its constituent funds and has been reconstructed by Eurekahedge since December 31, 2006 using a rules-based methodology, and avoiding survival and backfill biases. The current combined AUM of the 50 constituent funds exceeds US$110 billion.

“We are excited to join forces with Eurekahedge in designing a robust process that better captures the way institutional investors select and monitor hedge funds. MPI’s deep expertise in quantitative due diligence and fund analysis provides great insights into hedge fund portfolio construction.  In partnership with Eurekahedge, we helped build the first benchmark that aims to provide a reasonable proxy for a concentrated portfolio of institutional quality hedge funds,” said Michael Markov, co-founder and chairman of MPI.  

Based on this new benchmark, Quantvest Capital, a U.S.-based investment adviser, will create a daily tracker index which will be published on its website and has plans to launch an investible product that tracks the performance of the Eurekahedge 50 with a portfolio of liquid, exchange-traded securities.

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