Hedge Funds Fell 3% in October for Worst Drop Since 2011

(Bloomberg) -- Hedge fund returns fell almost 3 percent in October as global equity markets dropped.

The decline is the worst monthly performance since September 2011, Hedge Fund Research Inc. said in a report Wednesday.

Key Insights

  • The largest decline was in equity strategies. Long-short funds fell about 4 percent on an asset-weighted basis. That means they’re in the red about 1.7 percent this year through October.
  • The monthly losses were spurred in part by technology stocks, the report said. Many tech-focused hedge funds took a beating in October along with the overall market, which saw its worst month in seven years.
  • No major strategy was safe last month. October’s declines were spread across equity, macro, event-driven and relative value.
  • Macro strategies dropped 1.7 percent on an asset-weighted basis in the month. The funds, which bet on economic trends, are down 1.5 percent for the first 10 months of the year.
  • It wasn’t all bad in October for macro managers. Jeffrey Talpins’s Element Capital Management and Pharo Management’s macro fund both posted gains.

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