Long/Short Has Best Year In Four, Hennessee Says

Jan 10 2008 | 1:20pm ET

Hedge funds broadly outperformed the broader markets in 2007, according to year-end figures from the Hennessee Group.

Overall, the average hedge fund added 11.64% last year, with the Standard & Poor’s 500 rising 4.9%. The Hennessee Index outpaced the S&P500 by the widest margin in five years.

Short-sellers broke a four-year losing streak in 2007, with long/short equity hedge funds posting an average 12.08% returns. The strategy capitalized in particular on weakness in financials, which were battered by the subprime and credit crises.

“The equity markets are pricing in substantial losses among financial institutions due to their holdings in mortgage-backed securities and collateralized debt obligations,” Charles Gradante, managing principal, said.

International funds enjoyed a banner year, returning 20.02%, with global/macro and macro funds not far behind at 15.59% and 15.13%, respectively. Merger arbitrage funds added an average of 11.58%, distressed 8.87%, arbitrage/event-driven 7.78% and convertible arbitrage 4.36%.


In Depth

Q&A: Filippo Pignatti Morano On The Ultimate Alternative Investment...Classic Cars

Jan 29 2015 | 12:37pm ET

In 2011, Filippo Pignatti Morano launched a fund to invest in classic cars. FINalternatives...

Lifestyle

Looking For A Hedge Fund Manager? Try Davos

Jan 28 2015 | 8:48am ET

Davos, Switzerland seems to have become the hedge fund capital of the world—at...

Guest Contributor

Five Tips For Successfully Marketing Your Hedge Fund

Jan 30 2015 | 9:14am ET

When it comes to the hedge fund industry, the notion of “build it and it will...

 

Editor's Note