Hedge funds made ground in January, rising 1.30 per cent in the first four weeks of the year, with the special situations category faring the best, with a gain of 3.6 per cent, new figures showed yesterday.

Other notable gainers last month were the Lyxor L/S Equity Long Bias Index (+3.00 per cent) of hedge funds and the Lyxor Fixed Income Index (+2.56 per cent).

Investors in these funds will hope for stronger returns in 2012, after last year saw an exodus of money from the sector at a time of weak performance by some strategies amid volatile markets. Investors pulled out an estimated $5.2 billion from funds last December and hedge funds underperformed the S&P 500 for the year. Industry assets in total fell to $1.64 trillion, down by 7.7 per cent for 2011, and hit their lowest level since February 2010, according to TrimTabs and BarclayHedge data from earlier in February.

The Lyxor Hedge Indices are investable, asset-weighted indices; they are based on Lyxor’s managed account platform that covers all the major hedge fund strategies. The range comprises 16 indices ranging from global to mono-strategy or thematic indices.