Hedge funds have worst first half since at least 1990
HFR index drops 0.75% in first six months of 2008; worse than 2002
By Alistair Barr, MarketWatch
Last update: 5:51 p.m. EDT July 8, 2008
SAN FRANCISCO (MarketWatch) - Hedge funds turned in their worst first-half performance since at least 1990 this year as the credit crunch took a heavy toll on some managers, according to data released on Tuesday by industry tracker Hedge Fund Research.
HFR's hedge fund index fell 0.68% in June, leaving it down 0.75% during the first half of 2008, according to early estimates released by the firm.
That's the worst first-half performance since HFR started calculating its index in 1990. During the first half of 2002, in the midst of the dot-com bust, hedge funds tracked by HFR lost 0.01% on average.
Apart from that, hedge funds have always generated gains in the first halves of the past 18 years, according to HFR data.
The $2 trillion hedge fund industry has been hit hard by the global credit crunch, with some managers having to sell assets at fire-sale prices earlier this year to meet margin calls from brokers. Others, including Peloton Partners and Sailfish Capital, were forced to shut down.
Liquidations of hedge funds climbed 20% in the first quarter of 2008, while the number of fund launches fell.
Just 35 hedge funds started in the first half of this year, less than half the number that launched during the same period of 2007, industry publication Absolute Return said on Tuesday |
