eVestment|HFN Index Shows Hedge Funds Down 4.5% in 2011

Jan 11 2012 | 1:33pm ET

Hedge funds ended the year down 4.5% in 2011, according to research from eVestment|HFN.

The drop constitutes only the second year the HFN Hedge Fund Aggregate Index has been negative—and makes 2011 the second-worst year ever for hedge funds, after 2008.

That said, eVestmenHFN’s year-end report on the industry shows hedge fund AUM up by a moderate $3.7 billion over 2010, to $2.48 trillion. The increase was driven primarily by investor allocations.

The first half of the year saw a net increase in AUM of $73.6 billion, while the second half saw a net reduction of $38.7 billion.

Preliminary results for December suggest investor flows were again negative, making it the fourth straight month of net investor redemptions.

Measured by asset-weighted returns, the industry lost 1.2%, indicating larger funds outperformed their smaller rivals in 2011.

eVestment|HFN divides the hedge fund universe into winners and losers for 2011.

Among the winners were mortgage strategies (up 11.3% for the year); fixed income/credit strategies (up 3.8%, with funds specializing in munis and sovereign credit doing even better, at 4.1%); merger arbitrage (up 3.1%); healthcare sector funds (up 3.2%); and large multi-strategy funds (on an asset-weighted basis, up 2.2%).

Last year’s losers (or “laggards” in eVestment|HFN’s parlance) included long/short equity (down 6.52%, underperforming the S&P 500 TR Index by the largest margin since 1998); emerging markets equity (down 14.9%, in contrast to EM debt strategies which generally performed well in 2011); commodity strategies and CTA/managed futures (down 3.92%, and the asset-weighted performance was even worse, at negative 5.4%, indicating larger funds performed slightly worse); and UCITS structured hedge funds (down 8.38%).


In Depth

U.S. Treasury Moves on Reinsurance Loophole

Apr 24 2015 | 5:11pm ET

The U.S. Treasury Department has released proposed rules aimed at limiting the ability...

Lifestyle

Puerto Rico Woos The Rich But So Far Gains Little

Apr 17 2015 | 2:45am ET

Hedge fund manager Rob Rill grins. He has just had word that U.S. financial regulators...

Guest Contributor

Starting a ‘40 Act Fund Family? Don’t Forget Your Board

Apr 30 2015 | 7:18am ET

The convergence of the hedge fund and mutual fund worlds continues unabated, as...

 

Editor's Note