For the first time on record, hedge funds closed out March with a negative quarter, but still produced their best-ever performance against equity markets since 2001.
Fairfield County has a large cluster of hedge funds, which use complex trading philosophies in an attempt to beat more traditional investments.
An aggregate index maintained by HedgeFund.net was down 1.4 percent in March, which the New York City-based company attributed to volatility following the collapse of Bear Stearns.
Short sellers had their best first quarter since 2001, rising 11 percent on average and 2.2 percent in March.
Funds specializing in energy investments fared the worst, dropping 6.6 percent in the first quarter and 4.8 percent in March.
According to a HedgeCo.net report in early April, the head of Bank of America Corp.”™s alternative-investment group told attendees at a New York City hedge fund conference that fund collapses would occur as tight lending requirements made it difficult for managers to borrow capital, and as investors become disillusioned with returns.
In separate news, Stamford-based WR Capital Management L.P. has launched a $200 million fund for investing in hedge funds, according to FINalternatives. The firm is run by Walter Raquet, who previously worked at the predecessor company of New Jersey-based Knight Capital Group.
