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Returns mark out hedge fundsí stellar performers

Date: Tuesday, January 13, 2009
Author: Anuj Gangahar and James Mackintosh, Financial Times

Several hedge funds reported stellar returns last year even as the financial crisis claimed some of the most celebrated Wall Street names, stocks endured their worst year since the Great Depression and credit markets seized up.

Several analysts have predicted that the hedge fund industry might not survive this financial crisis. Even George Soros, the billionaire hedge fund manager, predicted late last year that hedge fund assets would fall by 75 per cent.

But funds across a variety of investment strategies managed impressive double-digit returns last year with some reporting numbers that, given the backdrop of dire market conditions, were spectacular, according to investors and funds of hedge funds.

Among the outstanding performers last year were some relatively unknown names such as Cedar Hill Capital Partners, which rose more than 100 per cent, and the Vicis Gamma fund which was up about 90 per cent, according to estimates from funds of hedge funds.

Better-known star performers included Ionic Capital, up almost 20 per cent last year with assets of $3.9bn, having been established at the start of the financial crisis in June 2007 with $600m.

Managed futures funds were among the best performers of the year, with Mulvaney Global Partners up more than 98 per cent, and Tudorís $1bn Tensor Fund up 36 per cent. QIMís $2.7bn global and managed futures fund was up 12 per cent. Other managed futures funds that performed well included AHL, Winton Capital Management, Blue Trend and Aspect Capital.

King Street, a $15bn New York-based credit and event-driven house also performed well with King Street Europe up 18 per cent while King Street Capital was up 3.6 per cent. Among other outstanding performers in a catastrophic year for many credit specialists was the Gracie Credit Fund, which has $850m under management and was up 18 per cent for the year.

In the commodities space, where many hedge funds suffered huge losses, Clive Capitalís flagship fund was up 44 per cent for the year towards the end of December and BlueGold, run by Pierre Andurand, also managed to avoid the carnage.

Touradji Capital Managementís flagship fund, which also focuses on commodities, was up 13 per cent for the year net of fees.

Further figures on the full year performance for individual hedge funds are likely to emerge in the coming days. According to Hedge Fund Research, the data provider, the average hedge fund across all strategies ended the year down 18.3 per cent in spite of a slight, 0.4 per cent, gain in December.