TORONTO (HedgeWorld.com)–Yet another hedge fund index is in the works, this time one that tracks the performance of Canadian-domiciled hedge funds.

The new index will be launched in 2006 by Canadian prime brokerage firm Scotia Capital. The proposed Scotia Capital Canadian Hedge Fund Performance Index has gained the support of local hedge fund managers and the Canadian chapter of the Alternative Investment Management Association.

“The new index will boost the industry’s profile, both domestically and internationally, as well as increasing investor awareness of the tremendous potential of the Canadian hedge fund market place,” said James McGovern, chairman of AIMA Canada, in a statement.

The initial release will be a broad industry index inclusive of all hedge fund strategies. It will then be followed up by a series of strategy-specific indexes and an emerging manager index that includes managers who don’t yet qualify for the main hedge fund index.

To be included in the index, managers will have to meet minimum track record and minimum size criteria in addition to being domiciled in Canada. According to Scotia officials, an index such as this wouldn’t have been possible even five years ago. The industry has now grown to the size where an index may be meaningful, said Collin Bugler, managing director of Scotia Capital’s prime brokerage operation, in a news release.

Institutional investors’ demand for hedge funds also has necessitated the development of an index. Scotia already provides traditional market indexes to investors in Canada and abroad as part of its overall investments and capital markets platform.

SBarreto@HedgeWorld.com

Contact Bob Keane with questions or comments at bkeane@investmentadvisor.com.