Market rally spurs hedge fund bounce

THE GLOBAL hedge fund industry has bounced back from the turmoil of 2011 to record its best start to a year since 2000.

Equity hedge funds led the recovery in the $2 trillion industry, as stock markets rallied on hopes of stronger growth and an increased resolve to tackle the Eurozone debt crisis.

The HFRI Fund Weighted Composite Index climbed 2.14 per cent in February and is now up 4.95 per cent for the year, Hedge Fund Research said yesterday. The HFRI Equity Hedge Index rose 6.9 per cent in February.

Lansdowne Partners, one of London’s most prominent hedge funds and run by arts donor Sir Paul Ruddock, was among the winners. The UK Equities Fund, which manages $7.5bn and is Lansdowne’s largest, is up 9.1 per cent for the year to date and its Global Financials Fund is up 7.98 per cent.

Greenlight Capital, run by controversial trader David Einhorn, is up six per cent for the first two months of the year although other top managers fared less well. New York-based Paulson & Co, run by John Paulson and managing about $23bn in assets, told his clients the Advantage Plus Fund dipped 1.5 per cent last month while the closely related Advantage Fund was off 0.8 per cent in February. The Advantage Plus fund is still up 3.5 per cent this year, however.

Kenneth J. Heinz, president of HFR, said hedge funds had made gains from “improvement or total reversal of the trends, sentiment and volatility which contributed to the challenging environment in 2011”.

2012 | SOME OF THE TOP HEDGE FUND PERFORMERS

● Event Driven
York Event Driven UCITS Fund
(York Capital Management) +8.09%

● Multi-Strategy
Hadron Alpha Select Fund
(Hadron Capital) +8.29%

● Long/Short equity Europe
Alken Absolute Return Europe
(Alken Asset Management) +9.20%

● Long/Short equity Global
Occam Global Emerging Markets Opportunities Fund -
(Occam Asset Management) +12.87%

● Macro
GAM Star Discretionary FX
(GAM) +11.03%