Hedge funds gain nearly 2% in October; John Paulson’s Advantage Plus Fund outperforms

November 9th, 2010
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The Hennessee Hedge Fund Index was up +1.95% in October, while the S&P 500 gained +3.69% and the Dow advanced +3.06%. Henessee’s Long/Short Equity, Arbitrage/Event Driven, and Global/Macro Indices all gained at least +1.72%. “Hedge funds posted strong positive performance, but lagged traditional benchmarks due to conservative exposure levels and losses from hedges,” commented Hennessee’s co-founder Charles Gradante. He added, “Arbitrage, event driven and credit strategies continue to drive gains, outperforming long/short equity strategies for the month and year-to-date.”

Hennessee’s Long/Short Equity Index gained +1.72% last month as the ongoing risk fluctuations remained a significant obstacle for fundamentals. Overall, materials and technology performed the best, bolstered by the government’s announcement of further quantitative easing. “The financial markets continue to rally as the companies reported solid earnings and the Fed announced an additional round of quantitative easing,” Mr. Gradante stated.

The Hennessee Arbitrage/Event Driven Index outperformed Long/Short Equity, advancing +1.97% in October as spreads tightened and managers balanced the fear of a double-dip recession against optimism for a market rally. “Many managers believe that the environment for merger arbitrage is improving and that we may be at the beginning of a ‘multi-year cycle’ of deal activity,” said Mr. Gradante. The Convertible Arbitrage Index advanced the most, gaining +2.49% last month.

Overall, the Hennessee Global/Macro Index led the way in October, gaining +2.40% as domestic and international equity markets rallied despite underperformance from managers’ reduced exposures and hedges. The International Index was up +3.37% and the Emerging Markets Index gained +2.38%, but Hennessee’s Macro Index advanced only +1.90% from October’s risk.

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For Detailed Investor Profiles on these Investors, click below:
Cevian Capital
Fortress Investment Group
Paulson & Co.
Related People: Andrew Hoine; Christer Gardell; Daniel Mudd*; John Paulson; Jude Driscoll; Lars Forberg; Mena Gerowin*; Michael E. Novogratz; Mike Barr; Randal Nardone; Robert Kauffman*; Sheru Chowdhry; Stuart Merzer; Wesley Edens; William F. Callanan*
Related Entities: Cevian Capital (UK) LLP; Cevian Capital AB; Cevian Capital AG; Cevian Capital I; Cevian Capital II; Drawbridge Global Macro Funds; Fortress Commodities Fund LP; Fortress Partners Funds; Fortress Value Recovery Funds ; Logan Circle Partners; Newcastle Investment Corp; Paulson Advantage Master Ltd; Paulson Advantage Plus Master Ltd; Paulson Real Estate Recovery Fund; Paulson Recovery Fund; PCI
Related Article Tags: Multi-Strategy, Long Short, Equity, Debt and Global Macro Hedge Fund News


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