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January 24, 2005 at 07:00 PM
NEW YORK (HedgeWorld.com)–Distressed managers charged ahead once again and finished the year as best performing sub-category of the CSFB/Tremont* Hedge Fund Index with a return of 13.62% for the year ended Dec. 31. The overall index closed out the year 9.64%.
In December, the index was up 1.6%, while distressed managers, part of the event-driven category were up 1.92%. For the year, event-driven funds showed the highest returns among the primary strategy categories. Event-driven, a grouping of distressed, multi-strategy and risk arbitrage sub strategies, was up 14.47%. Risk arbitrage was on the low end of the event-driven return spectrum with a gain of 5.45% in 2004.
Event-driven managers generally profited from long credit positions and distressed trades, said Robert I. Schulman, co-chief executive of Tremont Capital Management Inc., Rye, N.Y., in a statement.
While performing well for the year, event-driven strategies were not at the top of the CSFB/Tremont index last month, though, as long/short equities posted a positive 2.57% in December.
As U.S. equity markets picked up some gains in December, most hedge fund managers were able to pick up returns on the long side of their portfolios, said Oliver Schupp, president of Credit Suisse First Boston Tremont Index LLC, in a statement.
Dedicated short-bias managers were hurt by equity market gains and lost 4.87% in December and gave up 7.72% in 2004. The strategy was the only one to post negative returns over the course of the month or the year, while most strategies finished between 1% and 2%.
