More hedge funds sitting pretty above high-water marks thanks to 2012 performance gains

By Rob Copeland

Tue Nov 20, 2012

Some 54% of the industry in line to charge performance fees, a significant jump.

A broadly positive year of performance so far has left more than half of hedge funds above their high-water marks, according to an analysis of Americas-based funds reporting to the HedgeFund Intelligence database.

Some 54% of funds muscled above the mark as of the end of the third quarter, compared with 42% at the beginning of the year, meaning more than half of the industry is now in line to earn lucrative performance fees over the holiday season. Though the total is an improvement, it is still dramatically lower than two years ago, when 74% of funds were above their high-water marks after two years of strong gains following the financial crisis (the figures hit a bottom at the end of 2008, when just 39% of funds were in the money).1

The difference between being above and below the high-water point can be a...

ISSN: 2151-1845 / CDC10004H

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