Investment style profiles
THE HONEYMOON FOR hedge funds is over. Having wowed investors with returns of 11.2% in 2003, 4.14% in 2002, 9.36% in 2001, 13.48% in 2000 and 15.35% in 1999, according to the S&P Hedge Fund Index, the sector will struggle to post double-digit annual returns for 2004 after experiencing its most challenging quarter since 1998.
The S&P index, which represents a broad range of hedge fund strategies, was down 1.59% for the second quarter this year compared with a positive 1.92% in the first quarter. In the third quarter of 1998 the index fell by 2.63%.
In the past six years, hedge funds assets have ballooned. Estimates from Chicago-based research and data firm Hedge Fund Research (HFR) suggest that in 1998 total assets under management at hedge funds were $375 billion. By 2004 that...
