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From The Opalesque Team:

As hedge fund indices turn in estimated performance numbers for June, NJ-based research firm Markov Processes International (MPI) expects that the month-to-month rally hedge funds have experienced from March-May 2009 has come to an end.

MPI, which utilizes a synthetic track record for hedge fund index replication reports “the majority of hedge fund strategies will produce around 1% or even negative returns – with the exception of convertible arbitrate strategy, which continues a positive return of more than 2%” (Source).

Managers express caution for convertible arbitrage beyond the short term When the Opalesque New York Roundtable discussion turned to focus the various hedge fund strategies the managers noted that convertible arbitrage offered many opportunities but still expressed some caution.

“This market was hit with such a dramatic sell off in 2008,” said Chris Acito, founder of boutique consultancy Acito Advisory Group and former COO of Investorcorp’s Hedge Fund Group. “The market has rebounded to a significant degree with help from non-traditional cross over buyers; but there is likely to be still greater upside, particularly for managers with strong credit teams.”

Most of the opportunities in the space were attributed to the lack of players in the space. While ......................

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