Most hedge funds last year fell short of returns achieved in 2013, according to a report released Thursday by Preqin, an alternatives data provider.
Preqin’s All-Strategies Hedge Fund benchmark gained 3.8% in 2014, compared with a gain of 12.3% the previous year.
This was the lowest annual return since the benchmark lost 1.9% in 2011.
Preqin said in a statement that solid advances were often followed by losses as managers struggled to gain momentum.
The 2014 performance picture was more complex than the benchmark figure suggests, however.
Preqin data showed that all core strategies delivered gains sufficient to satisfy absolute return investors.
According to Preqin, 57% of investors it polled felt that hedge funds had at least met their expectations for the year, and 8% said they had exceeded expectations.
Only 13% of hedge funds met or exceeded the Preqin All-Strategies Hedge Fund benchmark return of 12.3% in 2013.
The benchmark experienced six monthly losses in 2014. The first quarter was the worst start to a year for performance since 2008, and the third quarter was the first negative one for the benchmark since the second quarter of 2012.