Hedge funds dive below high-water marks again

By Rob Copeland

Wed Apr 11, 2012

Only 38% of funds were above water in 2011, compared with 73% in 2010.

Funds above their high-water marks by year
  Key: + Above HWM / - Below HWM
(+/- do not denote performance)
Source: HedgeFund Intelligence database.
Fewer funds were above their high-water marks last year than even in 2008, according to a recent analysis of returns from Americas-based hedge funds reporting to the HedgeFund Intelligence database.

The widespread, if shallow, losses of 2011 resulted in a stark decline in the number of funds earning performance fees, and perpetuated the continuing nightmare of those that still haven't recovered their pre-2008 high-water marks (see chart to the right). Only 38% of all funds rose above their high watermarks in 2011, while 62% were left to subsist on management fees alone.

Only 39% of funds ended 2008 above their high-water marks, and at the time it seemed that it might...

ISSN: 2151-1845 / CDC10004H

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