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Komfie Manalo, Opalesque Asia:

The hedge funds industry ended 2014 with a 3.78% profits, the lowest annual return since the 1.85% loss seen in 2011, according to Preqin’s forthcoming 2015 Global Hedge Fund Report. It said that most hedge funds failed to match the returns made in the previous year, and solid advances were frequently followed by losses as managers struggled to gain momentum.

Amy Bensted, Preqin’s head of hedge fund products said, "After a solid year of returns in 2013, the performance of hedge funds in 2014 was widely seen as underwhelming. The returns of some funds, including those employing asset-backed and mortgage-backed strategies, were more impressive, and others, such as commodities and emerging markets-focused funds, provided a hedge against poor performance in related public markets."

However, Preqin said that all core hedge fund strategies delivered gains to satisfy absolute return investors in 2014. Furthermore, the strong returns of several focused strategies, such as CTA funds and value-orientated equity strategies, highlighted the need to manage a diversified portfolio of hedge funds to achieve the long-term low volatility of returns that hedge funds aim to provide.

Investors say hedge funds at least met expectations

As a result, the majority of investors (57%) felt hedge funds at least met expectations in 2014, with a notable proportion (8%) feeling hedge funds i......................

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