BILLIONS of dollars have been wiped off the value of global hedge funds this month as the industry shows little sign of recovery after a grim August.
Plunging equity prices, particularly in Europe, have contributed to a 2.3 per cent fall for the average hedge fund in September so far.
The provisional data from the HFRX global hedge fund index, made up of around 60 funds and representative of the industry as a whole, come after a grim August, when average losses were even worse at 3.47 per cent. Many managers were left with losses last month when market falls went beyond their expectations and they had not sufficiently protected their long bets with short positions.
SAC Capital Advisors, Third Point Offshore Fund and T2 Partners were among the losers in August, even though a similar slump in financial stocks helped much of the industry make gains during the financial crisis.
The September figures, from Hedge Fund Research, contrast with a solid performance last year and stellar results in 2009, when the industry made gains of 5.19 per cent and 13.4 per cent respectively.