The FT has reported that:
According to Hedge Fund Research, the data provider, the average hedge fund across all strategies ended the year down 18.3 per cent in spite of a slight, 0.4 per cent, gain in December. The worst performing strategy group was energy and materials, down 37 per cent for the year with fixed income-convertible funds down 34.6 per cent. Distressed funds fell 25.1 per cent and quantitative directional funds were down 21.3 per cent.
Unsurprisingly, by far the best performing strategy class was short bias, taking advantage of slumping equity markets to rise 28.3 per cent during the worst year for stock markets since 1931. The systematic diversified group which includes managed futures funds was up 18.3 per cent for the year.
The S&P 500 index dropped almost 38.5 per cent last year, its worst since 1931, putting the performance of hedge funds into context, with every hedge fund strategy group beating the S&P.
Two reasons for noting this. First, at least hedge funds are largely offshore so these losses are not tax allowable.
Second, and I can't resist this. In January 2008 I wrote:
[Tax havens] will also have a torrid year financially as the securitisation, hedge fund and private equity markets that provide serious quantities of business for some havens have a tough time financially
OK, so that's "I told you so" stuff, but when you see how far wrong some (like the FT and Economist) got this it's got some satisfaction attached.