Opalesque Industry Update - According to Preqin’s Hedge Fund Analyst, hedge funds made a loss of 0.17% in January 2014, the
benchmark’s first month in negative territory since August 2013. The decline in equity markets led to
negative returns posted by long/short funds; however these funds did outperform the S&P 500 Index, which
was down more than 3.5% for the month. The best performing hedge fund strategies for January were
relative value and event driven strategies, with these benchmarks up 0.77% and 0.66% respectively.
Other Key Facts:
Relative value was the top performing strategy benchmark in January 2014, as a result of strong
gains posted by fixed income arbitrage (+1.60%) and relative value arbitrage (+1.43%) strategies.
Long/short was the worst performing strategy category, as a result of losses posted by long/short
equity (-0.28%) and long bias (-1.45%) funds.
Macro strategies posted similar returns to the overall hedge fund benchmark (-0.15%).
CTAs were back in the red in January following three months of positive performance, with returns of
-1.08%, taking 12-month returns to -2.59%.
Europe was the top performing regional benchmark with funds focused on the region returning
0.65%, marginally ahead of North America-focused funds (+0.55%).
Funds focused on emerging markets suffered notable losses, with average returns of -2.27%, and
there were also negative monthly returns for funds focused on Asia-Pacific (-0.51%).
UCITS funds also posted losses in January with the average UCITS fund down 0.41%, as a result of
negative returns posted by long/short (-0.76%) and macro funds (-0.12%).
Funds of hedge funds again underperformed compared to the overall hedge fund benchmark, with
average returns of -0.57%.