Hedge Fund Industry 2010
Hedge Funds Enter 2011 Amid Gains and an Investigation
It was another year of gains for the hedge fund industry but the end of 2010 was marked by uncertainty created by the insider trading probe. This broad investigation concerned many funds and will continue to loom over managers in the coming months.
In 2010, hedge funds on average returned 7.11% through November, according to the latest data from Hedge Fund Research Inc. The Dow Jones Industrial Average climbed 11% in 2010, with December being particularly strong.
That solid return, while not as heady as the 19% return the industry saw in 2009, builds on the rehabilitation of the industry and its ability to rise in any type of market. The financial crisis contributed to a bleak 2008 for hedge-fund managers, in which they lost 19% on investments and some put up "gates" to stanch an exodus of investor funds.
This past year, managers who wager on and against stocks, those who make macro bets based on global economic and financial data, as well as those who trade beaten-down bonds were among the best performers, said Joe Omansky, who tracks hedge-fund performance for Trusted Insight, a platform for institutional investors to share investment ideas. Funds that focused on shorting stocks were less successful in 2010, he said. Source
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