Hedge Fund Returns In Q1, Q2 Best In Six Years

Jul 10 2009 | 9:26am ET

Hedge fund consultancy the Hennessee Group announced today that the Hennessee Hedge Fund Index gained +11.74% during the first six months of 2009, the strongest gain for the benchmark since 1999 when the index rose +14.81%.  Over the same six month time period, the S&P 500 Index is up +1.78%, resulting in nearly +10% in outperformance for the Hennessee Hedge Fund Index.      

“The last time we saw a double digit gain for hedge funds in the first six months of the year was in the midst of a strong bull market when the S&P was also experiencing double digit gains,” said Charles Gradante, co-founder of Hennessee Group. 

“Conversely, this year, the S&P has been extremely volatile and has advanced a little less than +2% since January.  Hedge fund managers have demonstrated an ability to generate alpha, via strong stock selection on both long and short side of their portfolios while taking on little directional exposure.”

“2008 was the worst year for hedge funds in terms of performance since Hennessee Group began tracking performance and assets in 1987,” said Lee Hennessee, managing principal of the firm.  “This year’s performance, on the heels of such a difficult year, illustrates the resiliency of the hedge fund industry and is likely to lead to renewed interest and growth for the hedge fund industry as the year progresses.”

  First Six Months of Year Full Year
Year Hennessee Hedge Fund Index S&P 500 Hennessee Hedge Fund Index S&P 500
2009 11.74% 1.78% - -
2008 -1.96% -12.84% -19.84% -38.50%
2007 8.17% 6.01% 11.21% 3.55%
2006 5.45% 1.77% 11.40% 13.65%
2005 1.24% -1.69% 7.86% 3.01%
2004 2.40% 2.60% 8.24% 9.00%
2003 8.67% 10.76% 18.80% 26.39%
2002 -1.23% -13.80% -2.88% -23.37%
2001 3.12% -7.26% 4.36% -13.03%
2000 7.01% -1.00% 8.16% -10.13%
1999 14.81% 11.66% 30.78% 19.50%

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