After bounce, hedge funds slide again in November

Tue Nov 29, 2011 3:08pm EST
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By Katya Wachtel

NEW YORK (Reuters) - Whipsawing markets continue to baffle supposedly savvy hedge fund managers, who are hobbling again this month after registering a short-lived revival in October.

A Bank of America Merrill Lynch hedge fund index fell 1.02 percent through November 23, according to a report released Tuesday by Bank of America Corp (BAC.N: Quote) analyst Mary Ann Bartels.

With a week to go, it appears November is shaping up as another mediocre month for the $2 trillion hedge fund industry, in what is shaping up to be a rather forgettable year.

In October, it looked like hedge funds were turning a corner with the Standard & Poor's 500 stock index surging 11 percent. The big jump in stocks gave a boost to many managers whose funds were deep in the red.

But in November things turned decidedly gloomy in the markets, with the European debt crisis once again taking center stage and contagion fears spreading across the globe.

Still, the hedge fund industry can brag in November that the losses for the average fund were less than those registered by the S&P 500, which fell 7.3 percent through November 23.

With November's losses, a number of prominent funds will face a tough challenge to close 2011 in the black.

For instance, Lee Ainslie's Maverick Fund Ltd fell 1.5 percent through November 18, according to data compiled by HSBC's private bank. The fund is down 13.1 percent this year.   Continued...