Hedge fund performance deteriorates

From Euromoney Online:

HFs Suffer Worst First Half Since ’90


Hedge funds got off to their worst start in nearly two decades in 2008, the Independent reports. The exception was Man Group, the giant U.K. alternative asset manager, which posted solid results.

As the markets have weakened, hedge fund performance has suffered more than in the wake of the dot.com bust, as managers have had to write down billions or face closure. Peloton Partners, set up by Ron Beller and Geoff Grant, and Sailfish Capital have closed, while the private equity giant Carlyle ended its hedge fund business, and Citigroup in effect shut Old Lane, the manager it bought less than a year before.

Hedge Fund Research, a U.S. analysis group, said the industry index it compiles was the worst in the first six months of the year since it began tracking in 1990.

The group found that on average, hedge funds declined 0.75% this year, only the second time in 18 years the industry performance has fallen into negative territory. The first, in 2002, came in the fall out of the bursting of the technology bubble.

This compares with the first six months of 2007, when the industry advanced 7.45%. The highest recorded half year was in 1992, when global hedge funds were up 16.7%.

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