RBC: Hedge Funds Down 21% In 2008

Date: Tuesday, January 20, 2009
Author: FINalternatives.com

As more and more hedge funds report their December returns, it seems less and less likely that the industry ended its awful year on anything but a down note.

The average fund fell 0.35% last month, according to estimated returns of the RBC Hedge 250 Index, leaving the benchmark down 21.01% for 2008. Just one of the nine strategies tracked by RBC Capital Markets finished last year in the black—managed futures, which ended 2008 up 17.43% after returning 1.79% in December.

Convertible arbitrage, by contrast, ended the year down 37.82%, despite a 0.62% return last month. Other big losers include event-driven credit, down 33.89% and multi-strategy, down 33.82%.

Mergers and special situations funds lost 23.48% last year, fixed-income arbitrage lost 22.84%, equity long/short lost 15.88%, macro lost 6.57% and equity market-neutral lost 4.29%.