Telegraph.co.uk – The glamour and allure of hedge funds has faded, according to figures, which show the amount of money invested in them halved over the past year as returns fell below 7pc.
Oliver Schupp, the head of investment bank Credit Suisse’s hedge fund index, said around $60billion-$65billion had been invested internationally in hedge funds during the past year, compared with more than $120billion in 2004.
“2004 was a record year, with never seen before figures, but investors got 4pc-5pc after performance fees and put the brakes on”, he said.
“In all parts of the world, excluding the US, investors fared better investing in equities last year.”
Hedge funds’ average rate of return is estimated to have fallen by 3 percentage points to 6.62pc for 2005 – less than half what investors could have made by investing in the FTSE 100. But the final figures from CSFB’s Tremont index, which tracks more than $800billion worth of assets worldwide, are expected to show London-based funds fared better than their US counterparts.
