Structured Credit Hedge Funds Battered In ‘08

Feb 17 2009 | 1:28am ET

Structured credit hedge funds did not weather the credit crisis at all, with the average fund losing about 40% last year.

The Palomar Structured Credit Hedge Fund Index fell 39.48% in 2008. The index was particularly hard-hit in the final four months of the year, losing 6.16% in September, 4.25% in October, 5.99% in November and 0.74% in December. But even that dismal record pales in comparison to the 17.15% drop suffered in February, mostly due to the collapse of a Peloton Partners asset-backed hedge fund.

“Structured credit got terribly hit; liquidity was virtually non-existent,” Markus Kroll of Palomar Financial Services Group told Reuters. But, he added, “there a few funds that have done really well.”

Those funds are finding their peers fewer and farther between: Many structured credit funds went under last year; the Palomar index had just 19 constituents at the end of last year, down from 30 at the end of 2007 and 40 in July 2007.


In Depth

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note