Asset totals reflect internally run, single-manager hedge funds and separate accounts, including long-only funds that charge hedge-fund-style fees; they exclude funds of hedge funds, overlay accounts, funds managed by third parties, mutual funds and traditional long-only money, dynamic money market funds, assets in collateralized debt and bond obligations, private equity and venture capital.
Despite a horrible year in most global markets, these 100 funds all have three-year annualized returns that run to solid double digits; a majority were up in 2008. Remarkably, one firm, Paulson, has two funds in the top four, No. 1 Paulson Advantage Plus (event-driven) and No. 4 Paulson Enhanced (merger arbitrage). In second place is Balestra Capital Partners, a global macro fund, third is Vision Opportunity Capital, a merger arbitrage fund, and fifth was Quality Capital Management-Global Diversified. Strong performance in weak markets is hedge funds’ most basic appeal and these funds did nothing to dispel that idea last year.