Hedge funds as represented by the Credit Suisse/Tremont Hedge Fund Index are currently on track to post their best annual returns in ten years.

Through 30 September 2009, the Credit Suisse/Tremont Hedge Fund Index is up 15 per cent with 83 per cent of all funds posting positive performance.

According to a report by Credit Suisse Tremont, 26 per cent of all hedge funds have fully recovered their losses from 2008, i.e. they have regained all losses to meet or surpass previous peak performance levels.

Overall, the industry experienced net outflows of USD4.8bn in the third quarter.
 
Sizeable redemptions occurred in the event driven sector, resulting in a net outflow of USD7.4bn for the quarter.

The long/short equity sector experienced the most significant increase in new capital, resulting in a net positive flow of USD3.0bn for the quarter.

Convertible arbitrage managers continue to lead all sectors in performance, with the best performing fund in the index up 209.9 per cent YTD. Overall, the strategy has generated cumulative returns of 40 per cent through September and has been positive every month-to-date in 2009.

Including performance gains, total hedge fund assets under management are estimated at USD1.4trn as of 30 September 2009. This is up from an estimated USD1.3trn as of 30 June 2009.