Bloomberg - Hedge funds, on course for the worst year on record, will stem losses in 2009 as managers of equity long-short funds and macro funds attract investors, Peter Douglas, principal of hedge-fund consulting firm GFIA Pte said.

Managers of credit strategies may also outperform because a dearth of available credit from banks will create a niche opportunity, said Douglas, also the chairman of the Asia chapter of the Alternative Investment Management Association.

While the industry has lost more than a fifth of its assets from the peak of $1.9 trillion in June in the worst market turmoil since the Great Depression, hedge funds have on average outperformed global benchmarks. They declined 18 percent on average through Nov. 30, compared with a 44 percent slide in the MSCI World Index in the period.

“We had all sort of bad stuff going around, but in the end, you’ve been far better being in hedge funds than anywhere else, except for keeping your cash under the bed,” said Douglas in a telephone interview Dec. 17. “I don’t think that the deleveraging process is completely finished and we will see some more next year, but the bulk of it has happened already.”

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