Hedge funds still on the upside in January with the Hennessee index at +1.10%

Date: Tuesday, February 10, 2009
Author: Komfie Manalo, Opalesque Asia

Hedge funds kicked off the year on a positive note as Hennessee Group reported on Monday that its hedge fund index jumped 1.10% in January. Comparatively, the S&P 500 declined 8.57%, the Dow Jones industrial average shrunk 8.84%, and the NASDAQ composite index declined 6.38%. Bonds also declined as the Barclays aggregate bond index retreated 0.88%.

Charles Gradante, co-founder of Hennessee Group said "On a relative basis, hedge funds outperformed by more than 10%, protecting a significant amount of capital."

Lee Hennessee, managing principal at Hennessee Group, said $6.5bn had poured into mutual funds during the last week of January; a continued trend could indicate a bullish sign for equity markets.

FT.com and Bloomberg.com reported yesterday that several funds posted more than 10% returns in January, including two funds from William von Muffling's New York-based Cantillon Capital. The $1bn Cantillon Europe made 12% and the $1.8bn Cantillon World returned 10%. London oil specialist BlueGold, a $1.2bn fund, posted 13% returns. Cedar Hill Capital Partners produced the highest return at 22% last month.

A separate report by HFR said hedge funds had performed about 9 percentage points better than the S&P500. HFR's composite hedge-fund index rose 0.39% so far in January.