Despite the fact hedge funds have staged a remarkable about-face this year, last year’s negative returns are dragging many hedge funds below their high water mark, according to Hedge Fund Research.

In the third quarter, about 66% of hedge funds were still below the mark and unable to collect their 20% profit fee. Year-to-date through the end of October, hedge funds have delivered an average 17% return, but they would need to double investors’ money to be able to collect their fees. Last year, the average hedge fund lost 19%.

As Hedge Fund Research President Kenneth Heinz told The Wall Street Journal, the hedge fund industry “is recovering, but not yet recovered.”

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