Money managers under the microscope
May was a bumper month for the battered hedge fund industry with an impressive 5.23 percent return, the best monthly gain in almost a decade.
The data, from Hedge Fund Research, takes returns for the first five months of the year to 9.43 percent. After last year’s record losses, this is a much healthier figure and more reminiscent of the returns during the industry’s boom years such as 1999 or 2003.
Early data from Credit Suisse/Tremont meanwhile puts the monthly return at 3.61 percent, making a year-to-date 6.25 percent.
So are the good times back for hedge funds?
Well, possibly not. While the headline figure looks good, it comes during what Sarasin’s Guy Monson calls “a most extraordinary rally”. The MSCI World index is up 8.67 percent this month, while for the first five months of the year it has risen 5.4 percent.
Data from Hedge Fund Research shows they returned 0.39 percent in January, having lost 18.73 percent in 2008, although they gained 0.21 percent in December.
The start of a revival in hedge fund returns? Well, maybe, and maybe not.
One explanation is that returns are just bouncing back after losses were exacerbated by redemptions late last year.