Almost twice as many hedge funds went into liquidation in the first three quarters of 2005 as in the whole of 2004. The first nine months sa...

Almost twice as many hedge funds went into liquidation in the first three quarters of 2005 as in the whole of 2004. The first nine months saw liquidations of 484 hedge funds out of 7,436 that started the year, said Hedge Fund Research, a Chicago-based research company in a report. But returns on hedge fund investment, at 9.2 per cent, earned mainly in the second half, nearly doubled the gains of the Standard and Poor's 500 Index last year, according to the report. This return is broadly similar to the 2004 figure but is substantially behind 2003’s 19.6 per cent increase. The S&P 500 posted a gain of 5.8 per cent for 2005. Elsewhere, CSFB/Tremont have estimated that hedge fund investments yielded 6 per cent returns in 2005 and the Hennessee Hedge Fund Index climbed 8 per cent during the year. According to Hennessee, overseas and especially emerging-market hedge funds performed the best last year, with managers focused on the Asia-Pacific region, Latin America and Europe returning 19.9 per cent, 19.7 per cent and 16 per cent respectively. Convertible-arbitrage was the only strategy to lose money in 2005, falling 2.2 per cent on average.