Financial Crisis of 2008
Financial Crisis & Hedge Fund Performance
(http://HedgeFundBlogger.coM) Interesting article below looking at recent hedge fund performance vs. the S & P 500. Many hedge funds may have been dragged down farther than they would ever have liked, but I still believe when the market does correct hedge funds will be in place to outperform everyone else in the market once again. The biggest worry I have heard lately is that it may take 4-6 years for the market to to turn again.
Hedge funds as measured by both the Greenwich Global Hedge Fund Index ("GGHFI") and the Greenwich Composite Investable Index ("GI2") declined marginally when compared with global equity returns during the month of October.
The GGHFI and GI2 posted declines of -5.06% and -8.53% on the month compared to global equity returns in the S&P 500 Total Return (-16.79%), MSCI World Equity (-19.05%), and FTSE 100 (-10.71%) equity indices. Year-to-date, the GGHFI and the GI2 have shed -14.29% and -16.60%, while the S&P 500 Total Return, MSCI World Equity, and FTSE 100 Indices have lost -32.84%, -39.75%, and -32.21%, correspondingly. 36% of constituent funds in the GGHFI ended the month with gains.
"October's returns are the result of similar market conditions that impacted hedge funds in September. Although long/short equity funds were notably lower, other event driven and arbitrage funds that trade in more illiquid securities were also negatively affected due to redemptions and forced selling. " notes Margaret Gilbert, Managing Director.
Long/Short Equity managers experienced roughly half the losses of global equity markets during October, losing -7.88% on average. Source