Hedge-Fund Assets Rose by $4.6 Billion in December, Report Says

Date: Wednesday, January 20, 2010
Author: Tomoko Yamazaki, Bloomberg

Hedge-fund assets grew by $4.6 billion in December in the eighth straight month of capital growth as investor confidence recovers along with global markets, according to Eurekahedge Pte.

Net inflows totaled $600 million in December, while performance-based gains were $4 billion, the Singapore-based research firm said in a report. Assets under management totaled $1.48 trillion at year’s end, it said.

Hedge funds recovered from their record losses in 2008 as stimulus packages by governments around the globe helped stock and bond markets rebound. The Eurekahedge Hedge Fund Index, tracking more than 2,000 funds, rose 19 percent in 2009, the best performance in six years, when the index rose 21 percent.

The MSCI World Index, which includes shares in 23 developed nations, added 1.7 percent in December, rounding off a 27 percent advance last year, the best annual performance since 2003. Global corporate bonds posted a 16 percent return in 2009, the most since at least 1997, according to a Merrill Lynch index.

Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall.

To contact the reporters on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.netWarren Giles in Geneva at wgiles@bloomberg.net