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Hedge Funds Rose 1.6% in December, 13% in 2006, Report Says


Date: Monday, January 8, 2007
Author: Jenny Strasburg, Bloomberg.com

Jan. 8 (Bloomberg) -- Hedge funds globally returned an average 1.6 percent in December to finish the year with their best performance since 2003, according to Hedge Fund Research Inc.

Hedge funds tracked by the Chicago-based firm returned 13 percent in 2006, compared with a 15.8 percent increase including dividends by the Standard & Poor's 500 Index, a broad measure of U.S. equities, according to today's report. It was the biggest gain since 2003, when the private investment pools gained 19.6 percent.

Emerging-market managers, who invest in corporate and government securities in developing countries, were among the most successful in 2006, returning 25.1 percent, according to data compiled by Hedge Fund Research.

Hedge funds are largely unregistered pools of capital that cater to wealthy individuals and institutions and allow managers to participate substantially in profits from investments.

To contact the reporter on this story: Jenny Strasburg in New York at jstrasburg@bloomberg.net