Hedge Funds Reported Solid Returns In 2003

by Philip Morton, Investors Offshore.com

06 January 2004

Hedge funds performed well in 2003, according to data for the year to November from CSFB/Tremont Hedge Fund Indices.

The firm revealed that over the first eleven months of the year, emerging market hedge funds performed best, bringing in returns of 24.3%, closely followed by distressed debt hedge funds, which averaged 23% returns over the period.

Equity funds and macro funds also performed well, bringing in 18% and 15.8% respectively, and the average hedge fund was up 13.2% in the year to November.

CSFB/Tremont went on to reveal that only dedicated short bias funds lost out in 2003, dropping around -29.8%.

However, some observers have warned that despite the positive returns for 2003, the sector may be headed for a fall. Speaking to the Wall Street Journal last week, Craig Huff, president of Reservoir Capital Group LLC, suggested that:

"There is a hedge fund bubble because of this flood of money that is coming into funds from institutions who want an investment that isn't simply correlated with the stock market."

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