WEST PALM BEACH, FL (www.HedgeCo.Net) – December hedge fund returns may be depressed as a result of heavy losses encountered by many funds in early days of the month. According to Reuter�s news, manyhedge funds were caught off guard �when crude oil futures tumbled nearly 4.3 percent and the dollar gained broadly for the third straight session.� The losses were more serious in some portfolios andmay force such funds to shut down according to the report.
The report could not be immediately confirmed, some managers say they are not surprised. Philippe Bonnefoy, the head of Comas Management, an adviser to the alternative investment unit of Commerzbank Securities said, “Right now any number of hedge funds could be losing big chunks of their capital.� According to Bonnefoy, hundreds of funds trading in the energy market, currencies, and US bonds may be vulnerable.
While details have not been provided, some fund managers think they may have lost from 20 percent to upwards of 50 percent of the gains they made in 2004. An unnamed manager said “There are a lot of people out there who have been absolutely clobbered since the end of November.� Another manager, Tim Rudderow, of Mount Lucas Management fund which oversees about $1.5 billion in assets said, “If you made money in November and you didn’t change your positions in early December, you probably lost a lot of money.�
Following the re-election of President Bush, investors stormed the markets pushing stock indexes up as new levels of volatility returns to the markets. November ended up as a very good month for many hedge funds, many suffering from lackluster performance during the first three quarters of 2004.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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