Index Flash

Hedge fund assets cross US$1.7 trillion for the 1st time since Sep-08

Eurekahedge Preliminary Report – 09 March 2011 Hedge funds were up for the eighth consecutive month in February as managers took advantage of buoyant market sentiment appetite and rallying underlying markets. The Eurekahedge Hedge Fund Index was up 1.17%1 through February, with the year-to-date return at 1.36%. The MSCI World Index gained 2.75%3 during the month. Assets under management cross US$1.7 trillion for the first time since September 2008. Global hedge fund assets up 13.4% since start of July 2010. Hedge funds witness eighth consecutive month of positive returns. North American hedge funds gained 2.08% in February and are up 14.57% over the last six months. Japanese hedge funds gained 1.92% in February and are up 10.15% over the last six months. Distressed debt hedge funds are the best performing of 2011 so far, with gains of 3.94%. 58% of hedge funds are above December 2008 watermark. Main Indices
Table 1: Main Indices

Index Eurekahedge Hedge Fund Index Eurekahedge Fund of Funds Index Eurekahedge Long-Only Absolute Return Fund Index Eurekahedge Islamic Fund Index

Feb 2011 Est1 1.17 0.65 0.15 -0.80

2011 Returns 1.36 0.64 -0.64 -1.29

2010 Returns 10.83 4.43 15.00 9.58

Regional Indices North American hedge funds delivered the best performance amongst the major hedge fund regions1, gaining 2.08% in February. The S&P500 was up 3.20%, during February, reaching a 32-month high during the third week of the month. Increased risk appetite during the first three weeks led to a sustained rally in the equity markets, as better-than-expected corporate earnings and increasingly positive outlook on the global 1

Index Flash

Hedge fund assets cross US$1.7 trillion for the 1st time since Sep-08
economy led market sentiment. Managers in the merger & acquisition space also took advantage of the healthy corporate activity with a number of funds benefitting from the Sanofi-Aventis and Genzyme deal. February was the sixth consecutive month of positive returns for North American managers, with the Eurekahedge North American Hedge Fund Index gaining 14.57% during this period. Most other regions also delivered positive returns, with Japanese hedge funds gaining 1.92% in February as the strong corporate activity continued in the market. Funds investing in financial and insurance stocks, as well as material and mining companies, posted healthy gains – the Nikkei 225 was up 3.77% % during the month. Returns from European hedge funds were also positive in February, up 0.57%, while Eastern Europe & Russia investing funds gained 1.66%. Asia ex-Japan hedge funds witnessed losses to the tune of 0.83%, amid declines in underlying markets – the MSCI Asia Pacfic ex Japan Index was down 2.36%.
Table 2: Regional Indices

Index Eurekahedge North American Hedge Fund Index Eurekahedge European Hedge Fund Index Eurekahedge Eastern Europe & Russia Hedge Fund Index Eurekahedge Japan Hedge Fund Index Eurekahedge Emerging Markets Hedge Fund Index Eurekahedge Asia ex-Japan Hedge Fund Index Eurekahedge Latin American Hedge Fund Index Strategy Indices

Feb 2011 Est1 2.08 0.57 1.66 1.92 -0.33 -0.83 0.09

2011 Returns 3.06 1.37 5.50 3.01 -0.72 -2.32 0.02

2010 Returns 13.67 9.06 16.69 8.27 10.76 10.80 9.84

All strategic mandates registered positive returns for February, with distressed debt managers once again coming out on top and extending their winning run into a sixth consecutive month. The increased risk appetite and the rallies in equity markets also translated into gains for high yield – the Merrill Lynch US High Yield Index was up 1.34% during the month while the average distressed debt manager raked in gains of 2.11%. CTA/managed futures funds also witnessed some hefty profits, gaining 1.90% in February as energy and precious metals witnessed price jumps due to political tensions in the Middle East – the S&P Goldman Sachs Commodity Index was up 3.75%. Long/short equity managers also finished the months with strong gains, up 1.14%, capitalising on the buoyant equity markets.
Table 3: Strategy Indices

Index Eurekahedge Arbitrage Hedge Fund Index Eurekahedge CTA/Managed Futures Hedge Fund Index Eurekahedge Distressed Debt Hedge Fund Index Eurekahedge Event Driven Hedge 2

Feb 2011 Est1 0.95 1.90 2.11 0.58

2011 Returns 1.86 1.10 3.94 1.04

2010 Returns 9.15 12.33 21.66 15.51

Index Flash

Hedge fund assets cross US$1.7 trillion for the 1st time since Sep-08
Fund Index Eurekahedge Fixed Income Hedge Fund Index Eurekahedge Long/Short Equities Hedge Fund Index Eurekahedge Macro Hedge Fund Index Eurekahedge Multi-Strategy Hedge Fund Index Eurekahedge Relative Value Hedge Fund Index

0.72 1.14 0.60 0.49 1.09

1.50 1.55 -0.08 0.55 1.51

9.93 10.17 7.83 9.72 11.41

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Based on 39.15% of the funds reporting their February 2011 returns as at 9 March 2011. The MSCI World Index Free – Local Currency.



Not including Eastern Europe and Russia - it is a relatively new region for hedge funds with a small number of funds.

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