Hedge funds on course for record returns

Date: Thursday, October 22, 2009
Author: Money Management.com

Hedge funds are set to record their best annual returns in 10 years, according to the Credit Suisse Tremont Index report.

The index is up 15 per cent for the year-to-date, with 83 per cent of all funds posting positive performance.

The report showed that 26 per cent of all hedge funds have “fully recovered” their losses from 2008, while a further 27 per cent of hedge funds still need to regain 15 per cent (or less) to reach previous peak values.

The report also showed that convertible arbitrage managers remain ahead of all sectors in performance, generating returns of 40 per cent.

The most significant redemptions occurred in the event-driven sector, resulting in a net outflow of $7.4 billion for the quarter, while the long/short equity sector experienced the most significant increase in new capital with a net positive flow of $3 billion for the quarter.

Meanwhile, total hedge fund assets under management (including performance gains) has risen to around $1.4 trillion as of September 30, 2009, up from $1.3 trillion as of June 30, 2009.