Funds of Hedge Funds Struggle In Q1

Jun 27 2008 | 12:53pm ET

Statistics released this month by BNY Mellon Asset Servicing showed that funds of hedge funds failed to produce positive returns during the first quarter of 2008, dropping an average of 4%, extending the group’s negative returns to three consecutive quarters.

Funds of hedge funds were however, outperformed by property (down 3.5%), U.K. bonds (down 1.1%) and cash (up 1.3%). But despite their relatively weak performance, fund of hedge funds managers still outperformed other key investment sectors, including British and overseas equity pooled funds, which fell 9.7% and 9.5%, respectively.

“Along with one of the worst starts ever to a year for the equity markets, pooled funds of hedge funds also suffered from negative returns in January and March, producing the lowest quarterly return we have seen,” said Alan Wilcock, performance and risk analytics manager at BNY Mellon Asset Servicing.

According to the bank, the average fund of hedge funds held 48.4% of its assets in directional strategies, 13.1% in event driven strategies, 17.2% in non-directional strategies and 21.4% in other (unspecified) strategies and cash, as of the end of March.

BNY Mellon Asset Servicing's fund of hedge funds universe currently covers 19 separate funds with over £4.9 billion in assets (US$9.6 billion).

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…