Reuters.uk – Hedge funds within the first two years of doing business tend to chalk up higher returns than older funds, which is a key factor for clients to watch, a senior industry figure said onWednesday.
“There does seem to be some evidence that if you invest in younger hedge funds out there, you will get a better return than in more established hedge funds,” Stephen Oxley, managing director of Pacific Alternative Asset Management Co., told an IQPC conference.
Hedge funds less than two years old delivered an annualized return over 10 years to December 2004 of 16.91 percent compared with 6.38 percent all funds in the universe of portfolios tracked by Hedge Fund Research (HFR), Oxley said.
“The gap is still significant even after taking account of the failure rate of start-ups, a factor known as survivor bias.”
