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HF Losses Worst in North America

Date: Wednesday, January 14, 2009
Author: James Armstrong, Hedge Fund Correspondent, Markets Media Online

Hedge funds that invested in North America suffered the greatest losses in 2008, the worst year on record for the funds globally, according to a report released Tuesday.

Hedge funds lost $350 billion globally in 2008, while funds that invested in North America shed $183 billion for the year, according to a preliminary report released by Singapore-based data provider Eurekahedge Pte.

Industry tracker Credit Suisse/Tremont said Monday that hedge funds lost an average of 18.8 percent.

That figure is similar to ones released earlier by Hedge Fund Research (18.3 percent loss) and Hennessee (19.15 percent loss). Provisional numbers supplied by HedgeFund.net suggest a slightly smaller loss, but still firmly in double digits.

The Credit Suisse/Tremont Hedge Fund Index was up slightly in December, with a positive return of 0.3 percent. Hedge funds specializing in managed futures did the best, returning 2.28 percent in December and 18.23 percent for the entire year.

Other strategies performing well in December included equity market neutral funds, which were up 1.89 percent, and risk arbitrage funds, which were up 1.49 percent. Global macro, long-short equity, fixed-income arbitrage and emerging market funds also posted positive returns last month.

Short biased funds, which had been performing well in the bear market of 2008, stumbled in the last month, losing 2.55 percent, according to Credit Suisse/Tremont. Short funds were still up 13.87 percent for the year.