Hedge Funds Beat Stock Market in February, HFR Says

Date: Monday, March 9, 2009
Author: Saijel Kishan, Bloomberg

Hedge funds outperformed stocks and bonds last month, falling an average of 0.51 percent, according to a report by Hedge Fund Research Inc.

The decline left funds with a 0.59 percent loss in the first two months of the year, data released today by the Chicago-based firm show.

The Standard & Poor’s 500 Index of the largest U.S. companies tumbled 11 percent in February and 18 percent for the year. U.S. Treasuries were down 0.54 percent last month and 3.6 percent this year, according to Merrill Lynch & Co. indexes.

Passport Management LLC, the $2.1 billion hedge-fund firm run by John Burbank III in San Francisco, gained 3.1 percent last month, bringing its 2009 return to 7.3 percent, according to investors. Brett Barakett’s Tremblant Partners in New York returned 4 percent in February and 9.7 percent for the year. The two biggest funds run by Ken Griffin’s Citadel Investment Group LLC in Chicago rose an estimated 2.6 percent, bringing year-to- date returns to about 7.7 percent.

The worst-performing strategy last month was equity hedge funds, which lost 1.38 percent on average, according to Hedge Fund Research. Relative value funds, which seek to profit on price differences between markets, were the best-performing strategy, returning 1.13 percent, the company said.

Hedge funds lost 19 percent in 2008, the most since HFR began tracking data in 1990.

To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net