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Event driven only hedge fund strategy in the black for August says Preqin

Friday, September 27, 2013
Opalesque Industry Update - Preqin’s Hedge Fund Analyst database reveals that event driven was the only hedge fund strategy to produce positive returns in August (+0.49%), with all other single-manager hedge fund strategies falling back into the negative, with a benchmark return for all single-manager hedge funds of -0.08% in August 2013.

Event driven hedge funds also have the highest year-to-date performance for single-manager hedge funds, with net returns of 9.40%, and have outperformed all other single-manager strategies over the last 12 months and on a three- and five-year annualized basis.

Other Key Facts:

• Long/short hedge funds were the top performing strategy in July, with average net returns of 2.16%, but failed to match this in August, posting average net returns of -0.04%.
• CTAs are now on a 4-month losing streak after posting average net returns of -0.56% in August, with year-to-date performance of -2.54%.
• Macro strategy funds of hedge funds have year-to-date net returns of 3.45%, while macro strategy single-manager hedge funds have only managed net returns of 0.27% so far this year.
• Long/short hedge funds remain the most favoured strategy among investors, with 58% of investors we spoke to in August planning to make new investments in long/short funds over the next 12 months. 16% plan to invest in event driven hedge funds.
• European hedge funds avoided negative returns in August, posting average net returns of 0.19%, while North American hedge funds broke even.
• Asia-Pacific remains the top performing region over the last 12 months, with Asia-Pacific-focused hedge funds producing net returns of 16.64% over the past year, despite August returns of -0.33%.
• JPY-denominated hedge funds have produced impressive year-to-date returns of 17.14% and have an average net return of 24.79% for the past 12 months.

For more information and analysis, please see www.preqin.com/docs/newsletters/HF/Preqin_Hedge_Fund_Spotlight_September_2013.pdf

Amy Bensted, Head of Hedge Funds Products, commented: “Despite returns entering positive territory again in July following the negative returns of June, August has again been another disappointing month for hedge funds, with the benchmark down -0.08% for the month. Event driven was the only hedge fund strategy that managed to post positive returns in August at 0.49%, with the strategy producing returns of 16.15% over the past 12 months. CTAs, however, have continued to struggle and posted negative returns for the fourth consecutive month. While Asia-Pacific hedge funds endured a disappointing August, posting average net returns of -0.33%, hedge funds focused on the region have produced the highest net returns over the last 12 months at 16.64%.”

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