Welcome to CanadianHedgeWatch.com
Thursday, November 14, 2019

Hedge funds post best quarter return since 2005

Date: Wednesday, October 21, 2009
Author: Pensions & Investments

Hedge funds in the third quarter recorded their best three-month average return since the third quarter of 2005, recording a 7.25% gain, according to the Credit Suisse/Tremont Hedge Fund Index.

Also, 83% of all hedge funds had positive returns in the first three quarters of this year.

Year to date through Sept. 30, convertible arbitrage was the best-performing strategy, returning 40%.

In promising news for hedge funds, the index has recovered 61.8% of the losses incurred last year. Credit Suisse Tremont officials said 26% of all hedge funds have fully recovered their losses from 2008, while another 27% need to recoup 15% or less to reach their previous peaks.

However, hedge funds experienced $4.8 billion in net outflows in the third quarter, down from $18.4 billion in the second quarter and $75.5 billion in the first quarter. Net outflows for event-driven strategies totaled $7.4 billion in the third quarter, while long/short equity experienced net inflows of $2.9 billion.

Hedge fund assets totaled $1.4 trillion as of Sept. 30, from $1.3 trillion three months earlier, Credit Suisse Tremont officials estimate.

At a press briefing, Philippe Schenk, director of Credit Suisse’s alternative investments, funds and alternatives solutions group, said he is “confident” that net inflows will be in the black in the fourth quarter.

However, Oliver Schupp, president, Credit Suisse/Tremont index, said it will take more than positive returns to restore confidence in hedge funds because investors are focused on their liquidity needs. Hedge funds that changed their redemption terms midstream “damaged the industry,” he said.