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

Dillon Eustace: The Advantages of ICAVs

Feb 11 2016 | 7:51pm ET

As the growth of alternative investment vehicles continues, global asset managers...

Lifestyle

Citadel's Ken Griffin Donates $40M To New York's Museum of Modern Art

Dec 22 2015 | 9:23pm ET

Citadel founder Ken Griffin has donated $40 million to New York’s Museum of Modern...

Guest Contributor

Hedge Fund Marketing - Making the Most of Your Salesperson

Jan 20 2016 | 8:11pm ET

In this contributed article, Bruce Frumerman of Frumerman & Nemeth takes a close...