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

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.