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Hedge Funds Rose 1.8% in March for First Gain in 2009

Date: Wednesday, April 8, 2009
Author: Saijel Kishan, Bloomberg.com

Hedge funds rose an average of 1.8 percent in March, the first monthly gain of the year, led by managers who trade stocks, according to a report by Hedge Fund Research Inc.

Funds returned 0.52 percent in the first quarter, according to data released today by the Chicago-based firm. The Standard & Poor’s 500 Index of the largest U.S. companies rose 8.5 percent in March, curbing its loss for the year to 12 percent.

Equity hedge funds were the best-performing category last month, returning 3.4 percent, according to Hedge Fund Research. The worst performers were macro funds, which invest in markets from commodities to bonds, with a 1.21 percent loss, the company said.

SAC Capital International Ltd., the flagship fund of Steven Cohen’s $14 billion SAC Capital Advisors LLC, rose 3 percent in March, bringing its first-quarter gain to about 10 percent, according to a person familiar with the firm. David Einhorn, founder of $5.1 billion Greenlight Capital Inc. in New York, posted a 5.8 percent increase in March for his Greenlight Capital LP fund, giving it a three-month return of about 4.4 percent.

Cantillon Capital Management LLC, the $5 billion investment firm run by William von Mueffling in New York, lost about 7.9 percent in its World fund last month, according to a person familiar with the company. The fund lost 0.81 percent this year, the person said.

‘Unusual Behavior’

“Since Jan. 1, we have experienced an uncommon period of volatility in our performance due to a combination of country and sector risk factors exhibiting unusual behavior,” von Mueffling said in a March 30 letter to investors. The World fund posted a 10 percent gain in January.

Officials at the firms declined to comment on their returns.

Investors may have withdrawn as much as 13 percent from the $1.2 trillion industry in the first quarter, according to Huw van Steenis, a London-based analyst for Morgan Stanley.

Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising asset prices and participate substantially in profits from money invested.

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