Alternative Market Briefing

South African equity-centric hedge funds buck the trend

Wednesday, December 07, 2011

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Ruth Forssman By Beverly Chandler, Opalesque London:

South African equity-centric hedge funds enjoyed a strong November, according to the Prime Services division of Peregrine Securities. The firm reported average, asset weighted before fees for South Afican hedge funds serviced by Peregrine Securities, Prime Services division of:

Average For Nov 2011: (asset weighted, before fees)

(Total) Equity Hedge Funds: +2.21%
Long-short Equity Hedge Funds: +2.43%
Market Neutral Equity Hedge Funds: +1.13%

Year-to-date 2011: (asset weighted, before fees)

(Total) Equity Hedge Funds: +13.56%
Long-short Equity Hedge Funds: +15.20%
Market Neutral Equity Hedge Funds: +6.53%

Ruth Forssman of Peregrine reported that November was the second consecutive month of strong returns for hedge funds, saying: "This increases the likelihood that as an asset class hedge funds may outperform equity indices for year 2011. Coincidently, in 2010, we estimate that equity hedge funds* matched the gain on the Top40 for the year almost exactly (both delivered 17% before fees)."

Forssman notes that the correlation between aggregate hedge fund returns and global equity market returns has increased significantly over the last 15 years and asks whether this evidence leads to a number of discussion points such as: Is the scope for outperformance diminished? Does the current market regime provide opportunities for a particular investment ......................

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