Industry Updates

Credit Suisse/Tremont Hedge Fund Index +0.87% (est) in February (+1.04% YTD est)

Monday, March 08, 2010

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Opalesque Industry Updates - Early estimates indicate the Credit Suisse/Tremont Hedge Fund Index (“Broad Index”) will finish up +0.87% in February (based on 76% of assets reporting).

Key highlights for the month;
Managed Futures posted the best performance among the sectors this month as managers were able to gain from long exposures to short term interest rates and short exposure to declining currencies such as the Sterling. In response to an increase in market reversal situations and weaker overall signals, many trend followers also reduced risk allocation to equities and commodities.

Long/Short Equity funds performed in line with global equity markets in February, finishing up an estimated 1.58% as managers benefited from a favorable fundamental stock picking environment. Profits were driven largely by long exposures to cyclical sectors such as industrials, technology, and consumer discretionary, which outperformed during the month. Despite overall positive returns, many European-focused managers finished the month in negative territory due to increased market turbulence in the EU region.

Global Macro managers produced positive performance finishing up 1.25% in February. The largest sources of profit came from fixed income and foreign exchange positions. Funds capitalized on European sovereign credit stresses by taking short positions on the Euro. Moreover, managers with long front-end and short back-end positions on the yield curve benefited from an overall steepening in the curve which was largely driven by the Greek debt situation and the US Federal Reserve’s decision to maintain low rates.

Event Driven funds finished up an estimated 0.48% though returns were mixed across managers. Multi-strategy managers finished up slightly as losses from market hedges and shorts sometimes outpaced gains from long event equity and credit positions. Long-biased distressed managers experienced small gains on specific situations and credit improvements.

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