GFIA examines the 'December effect' on hedge funds

Many hedge funds appear to reduce their exposure towards the end of the year, a trend that fund of hedge funds GFIA analysed in its monthly Research Insights report, published yesterday. The Singapore-based firm did so using figures from 32 Asia-based long/short equity funds. "Given that most managers' performance fees are measured on a calendar year, exposures drop in December as managers reduce risk to protect that year's performance," says the report, which used data stretching ba…