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Assets under management cross US$1.7 trillion for the first time since September 2008.

Global hedge fund assets up 13.4% since start of July 2010.

Hedge funds witness eighth consecutive month of positive returns.

North American hedge funds gained 2.08% in February and are up 14.57% over the last six months.

Japanese hedge funds gained 1.92% in February and are up 10.15% over the last six months.

Distressed debt hedge funds are the best performing of 2011 so far, with gains of 3.94%.

58% of hedge funds are above December 2008 watermark.

Regional Indices
North American hedge funds delivered the best performance amongst the major hedge fund regions1, gaining 2.08% in February. The S&P500 was up 3.20%, during February, reaching a 32-month high during the third week of the month. Increased risk appetite during the first three weeks led to a sustained rally in the equity markets, as better-than-expected corporate earnings and increasingly positive outlook on the global economy led market sentiment. Managers in the merger & acquisition space also took advantage of the healthy corporate activity with a number of funds benefitting from the Sanofi-Aventis and Genzyme deal. February was the sixth consecutive month of positive returns for North American managers, with the Eurekahedge North American Hedge Fund Index gaining 14.57% during this period.

Most other regions also delivered positive returns, with Japanese hedge funds gaining 1.92% in February as the strong corporate activity continued in the market. Funds investing in financial and insurance stocks, as well as material and mining companies, posted healthy gains – the Nikkei 225 was up 3.77% % during the month. Returns from European hedge funds were also positive in February, up 0.57%, while Eastern Europe & Russia investing funds gained 1.66%. Asia ex-Japan hedge funds witnessed losses to the tune of 0.83%, amid declines in underlying markets – the MSCI Asia Pacfic ex Japan Index was down 2.36%.

Strategy Indices
All strategic mandates registered positive returns for February, with distressed debt managers once again coming out on top and extending their winning run into a sixth consecutive month. The increased risk appetite and the rallies in equity markets also translated into gains for high yield – the Merrill Lynch US High Yield Index was up 1.34% during the month while the average distressed debt manager raked in gains of 2.11%. CTA/managed futures funds also witnessed some hefty profits, gaining 1.90% in February as energy and precious metals witnessed price jumps due to political tensions in the Middle East – the S&P Goldman Sachs Commodity Index was up 3.75%. Long/short equity managers also finished the months with strong gains, up 1.14%, capitalising on the buoyant equity markets.

Full performance tables: Source

(press release)

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