Bloomberg – Hedge funds, private partnerships catering to wealthy investors and institutions, returned an average of 9.2 percent in 2005, lifted by a stock-market rally during the second half, according to Hedge Fund Research Inc.
Hedge-fund managers worldwide gained 9 percent in 2004 and 19.6 percent in 2003, according to the Chicago-based research firm. They got off to a slow start last year, up 1.9 percent in the first half as of June 30. Performance improved along with rising stock prices in the last six months, when the Standard & Poor’s 500 Index climbed about 6 percent including dividends.
“Hedge-fund performance had been mixed early in the year, but they finished on par with last year after a strong second half,” Josh Rosenberg, president of Hedge Fund Research, said in an interview yesterday.
Hedge funds, which usually require an investment of at least $1 million, try to make money whether financial markets rise or fall. While the average fund beat the S&P 500’s return of 4.9 percent in 2005, the industry continues to lag the gains of the 1990s. Hedge funds have risen 7.5 percent annually since 2000, down from 16 percent from 1990 through 1999.
