Pooled Fund of Hedge Funds See Lowest Quarterly Return

A press release said the return was the lowest since BNY Mellon started measuring performance in 2003, and was the third consecutive quarter that the median return was negative.

Pooled fund of hedge fund managers outperformed other key investment sectors including UK and Overseas Equity pooled funds, which returned -9.7% and -9.5%, respectively, the release said. However, they were outperformed by Property (-3.5%), UK Bonds (-1.1%), and Cash (1.3%).

Stronger results in earlier periods led fund of hedge funds to make some small gains over a one year period with a median return of 1.7%. Pooled fund of hedge fund managers also outperformed UK and Overseas Equity funds during the period which returned -8.8% and -1.9%, respectively. The results were even stronger over three and five years as the median fund returned 7.5% per annum and 8.2% per annum, respectively.

As of March 31, 2008, the average fund of hedge funds held 48.4% of its assets in directional strategies, 13.1% in event driven strategies, 17.2% in non directional strategies, and 21.4% in other (unspecified) strategies and cash.

The BNY Mellon Asset Servicing fund of hedge funds universe currently covers 19 separate funds with more than 4.9 billion pounds Sterling in assets.