New York (HedgeCo.net) – With the market decline over the last few months and with biotech and pharmaceutical stocks getting hit hard in the third quarter, the hedge fund industry could be looking at it first losing year since 2011 and possibly the worst year since 2008.

The Credit Suisse Hedge Fund Index (CSHFI) was clinging to a year to date gain of only 0.84 percent through the end of August. With the S&P dropping 2.64 percent, it is likely that the index will show a loss in September as well, but the question is, how much of a loss?

In the first few days of October, some of the more prominent hedge fund names have reported rather large losses with some that were heavily invested in biotech and pharma reporting losses in the double digit range. While it is unlikely the hedge fund indices lost anywhere near that much, it is possible that a loss will take the indices in to negative territory for the year. For the record, the CSHFI lost 2.5 percent in 2011.

Rick Pendergraft
Research Analyst
HedgeCoVest