International events affect hedge funds’ performance in May; Moore’s and Paulson’s funds fall
|June 7th, 2010||
|Hennessee Group has released its latest hedge fund index performance data for May of 2010. According to the report, the Hennessee Hedge Fund Index dropped -2.99% last month while still outperforming the S&P 500 (-8.20%), the Dow Jones Industrial Average (-7.92%), and the NASDAQ Composite Index (-8.29%). “May was the worst month of the year for hedge funds and the worst monthly drawdown since October 2008,” commented Charles Gradante, Co-Founder of Hennessee Group. “However,” he continued, “hedge fund managers avoided significant losses and outperformed traditional benchmarks on a relative basis due to conservative exposures, hedging and short positions.”|
The Arbitrage/Event Driven Index fell -2.62% last month, similarly affected by the widening credit spreads sparked by the Eurozone’s financial worries and sovereign debt concerns. Distressed funds performed the worst, falling -4.87% in May.
Hennessee’s Global/Macro Index dropped -3.50% last month, and international equities and global indices suffered similar losses as Europe’s €110 billion bailout failed to restore international investors’ confidence. According to the Wall Street Journal, two of the world’s largest hedge fund firms, John Paulson’s Paulson & Co. and Louis Bacon’s Moore Capital Management, are also struggling after the blow to the Eurozone. Paulson & Co.’s Advantage, Advantage Plus, credit, and Recovery funds all dropped at least -4.24% in May, according to investors, and Moore Global Investment, Moore Capital’s main fund, dropped over 9%.
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