Although hedge funds recorded a slightly negative performance in March, the first quarter of the year turned out to be the best since the third quarter of 2009 for several hedge fund strategies, with the long/short equity strategy advancing 6.1% in the quarter, according to Eurekahedge.
Multi-strategy and relative funds also fared well, gaining 4.93% and 4.29% respectively in the quarter. They did not meet the advancement of the equities markets, however, with the MSCI World Index, by contrast, gaining 10.94% in the first quarter.
Overall, the Eurekahedge Hedge Fund Index dropped 0.14% in March compared to gains of 2.05% in February and 2.10% in January.
Assets in hedge funds reached $1.76 trillion in the first quarter, a rise of more than $50 billion compared to the fourth quarter last year, according to Eurekahedge data. Separate reports from Credit Suisse and Deutsche Bank released earlier this year suggest the industry will grow to more than $2 trillion in 2012, surpassing the industry peaks of around $1.9 trillion seen in 2007 and again in 2010.
More than 100 new hedge funds were launched in the first quarter.
By last month, hedge funds were exhibiting the strongest start to a year in 12 years, with net gains across all regional and strategic mandates. The pace slowed in March with drops in equities across the globe, save for the United States.
Regional indexes were up slightly as often as they were down in March, with the most volatility seen in Asia ex-Japan hedge funds, which were down 2.72% in March but up 5.53% so far this year. The same funds were down 12.44% across 2011.
(CG)