Hedge Funds November 2010
Hedge Fund Aggregate Performance Dips 1.5% in November
The Bloomberg hedge fund index showed a 1.5% drop in November of 2010. The decline in hedge fund performance is likely connected to the European sovereign debt crisis that depressed stock markets around the world. This is the lowest drop in six months for the hedge fund industry.
The Bloomberg aggregate hedge fund index fell 1.5 percent, the most since May, when a sudden selloff in stocks known as the “flash crash” prompted investors to cut risk. Long-short equity funds, whose managers can bet on rising and falling stocks, dropped 1.6 percent last month and gained 6.1 percent since the start of the year.
Global stocks slumped 2.3 percent in November amid concern Europe’s debt turmoil may engulf Spain and Portugal after a bailout of Ireland failed to persuade investors that the crisis will be contained. Standard & Poor’s said last week it may cut Portugal’s credit rating. Prime Minister Jose Socrates has rejected suggestions the country may need a bailout.
Europe is “on the verge of collapse,” James Melcher, founder of New York-based hedge fund Balestra Capital Partners LP, said last week at the Hedge Funds New York conference, organized by Bloomberg Link. “Germany may leave the euro with a couple of stronger countries.” Source
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