Hedge funds are on track to deliver their best performance in a decade, according to Hedge Fund Research. As of Nov. 24, they were up an average of 18.81%. If they rise just another 63 basis points, they will beat their past record in 1999.
One of the standouts is a distressed debt fund run by Turnberry Capital International, up 130.69% through October. Another is the Palomino long/short credit fund, up 114.43% through September. Other strategies that are producing standouts this year include convertible arbitrage, emerging markets, corporate bonds and relative value. Still, many hedge funds are struggling since 2008 was one of their worst years ever. The Turnberry fund, for instance, was down 68.71% last year.
Put into that perspective, as Mercer Principal Robert Howie told The Wall Street Journal, “Things are not as good for investors as the figures suggest. The hedge fund indices do not show funds that stopped disclosing their performance. Many investors are still trying to get their money back from funds that imposed gates.”