Hedge funds post gains in 2010

Trade publication HFN reported that by end of 2010, hedge funds assets under management reached $US2.4 trillion after raking in a total of $US79.5 billion in the last 11 months from metal and emerging market ventures.

Refuelled by investments from insurance companies, pension funds and institutional investors, the hedge fund industry seemed to slowly crawl out of the effects of client withdrawals and intense scrutiny from regulators in the past couple of years.

Heading the list of Europe’s best performing fund, Regent Fund hits 96 per cent gain mainly by trading gold, a commodity that rallied 28 per cent in 2010.

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Richard Hollington, Regent Fund manager, believed that worries on sovereign debt fired the gold rally and commented, “Lower rates make people try to avoid currency depreciation.”

An investment firm managed by 36 South Investment Managers, London-based Regent Fund holds around $140 million of assets. Last year, it relocated its base from New Zealand to London, a move which Hollington found practical considering the time zone.

Coming second in the list of Europe’s best performing funds, Zurich-based Alegra Capital gained 93 per cent mostly from its asset-backed transactions. Formerly blamed for the global spread of toxic assets, some forms of these investments, like bank loans to individuals or companies, now draw renewed investor interests as their prices plummeted after the crisis.

Using the same strategy as Alegra, Swiss fund Pernet von Ballmoos came third in the list after gaining 83 per cent from investing in securities made up of pools of at least 500 loans.