Stars were aligned for hedge funds in January, with most strategies ending in the black. The year starts with strong alpha generation and outperformance against major equity indices: the Lyxor HFI Index is up by 1.4% since 1 January, versus -1.2% for the MSCI World. Moreover, we have witnessed above average dispersion between managers. More than 10% of the hedge funds we monitor are close or above the 5% mark YTD. Using risk-adjusted metrics by strategy over a longer term horizon (below), the past 12 months suggest that L/S Equity, in addition to CTAs, has outperformed risk assets.