Wednesday, March 17, 2010


FoFs Underperform Single Manager Hedge Funds in 2009

Investors Still Need FoFs as Transparency and Managed Accounts Increase Complexity

From the First Quarter, 2010 issue of Barclay Managed Funds Report. The full report also includes 24 hedge fund and managed futures performance ranking tables and in-depth manager profiles. Subscribe. View Roundtables from back issues.

By the looks of the capital markets’ returns in 2009, it’s hard to imagine that a material amount of shrapnel from the global market crisis of 2008 still remains. With a US unemployment rate hovering above 10%, banks still attempting to clean up their balance sheets and repay their government rescue funds, and a cornucopia of regulatory change on the horizon, the S&P 500 still managed to return more than 26% in 2009, and higher risk assets, including high-yield bonds and emerging market equities, earned impressive returns of 58% and 78% respectively.

Hedge funds, despite continued redemption queues, also rebounded during the year with the Barclay Hedge Fund Index returning 23.90%. Funds of funds, while earning a favorable 10.28% return for the year, trailed their single strategy counterparts by a wide margin. Given that both single strategy hedge funds, in aggregate, and funds of funds posted similar losses of approximately 22%
in 2008, one might have expected the rebound in funds of funds in 2009 to have been healthier.

In order to dissect this performance disparity and evaluate the future role of funds of funds within the alternative investment universe, we have assembled the following panel of experts:

Jeffrey Holland, Liongate Capital Management
Scott C. Schweighauser, Aurora Investment Management LLC.
Lance Teitelbaum, Financial Risk Management

The complete article will be available on the website in May 2010. Subscribe to receive each issue of the Barclay Managed Funds Report as it comes out.

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