Index Flash

Hedge fund assets cross US$1.7 trillion for the 1st time
since Sep-08

Eurekahedge Preliminary Report – 09 March 2011

Hedge funds were up for the eighth consecutive month in February as

managers took advantage of buoyant market sentiment appetite and
rallying underlying markets. The Eurekahedge Hedge Fund Index was up
1.17%1 through February, with the year-to-date return at 1.36%. The
MSCI World Index gained 2.75%3 during the month.

Assets under management cross US$1.7 trillion for the first time
since September 2008.

Global hedge fund assets up 13.4% since start of July 2010.

Hedge funds witness eighth consecutive month of positive

returns.

North American hedge funds gained 2.08% in February and are

up 14.57% over the last six months.

Japanese hedge funds gained 1.92% in February and are up

10.15% over the last six months.

Distressed debt hedge funds are the best performing of 2011 so

far, with gains of 3.94%.

58% of hedge funds are above December 2008 watermark.

Main Indices
Table 1: Main Indices
Feb 2011 2011 2010
Index
Est1 Returns Returns
Eurekahedge Hedge Fund Index 1.17 1.36 10.83
Eurekahedge Fund of Funds Index 0.65 0.64 4.43
Eurekahedge Long-Only Absolute
0.15 -0.64 15.00
Return Fund Index
Eurekahedge Islamic Fund Index -0.80 -1.29 9.58

Regional Indices

North American hedge funds delivered the best performance amongst the
major hedge fund regions1, gaining 2.08% in February. The S&P500 was
up 3.20%, during February, reaching a 32-month high during the third
week of the month. Increased risk appetite during the first three weeks
led to a sustained rally in the equity markets, as better-than-expected
corporate earnings and increasingly positive outlook on the global

1
 Index Flash

Hedge fund assets cross US$1.7 trillion for the 1st time
since Sep-08

economy led market sentiment. Managers in the merger & acquisition

space also took advantage of the healthy corporate activity with a
number of funds benefitting from the Sanofi-Aventis and Genzyme deal.
February was the sixth consecutive month of positive returns for North
American managers, with the Eurekahedge North American Hedge Fund
Index gaining 14.57% during this period.

Most other regions also delivered positive returns, with Japanese hedge
funds gaining 1.92% in February as the strong corporate activity
continued in the market. Funds investing in financial and insurance
stocks, as well as material and mining companies, posted healthy gains –
the Nikkei 225 was up 3.77% % during the month. Returns from
European hedge funds were also positive in February, up 0.57%, while
Eastern Europe & Russia investing funds gained 1.66%. Asia ex-Japan
hedge funds witnessed losses to the tune of 0.83%, amid declines in
underlying markets – the MSCI Asia Pacfic ex Japan Index was down
2.36%.
Table 2: Regional Indices
Feb 2011 2011 2010
Index
Est1 Returns Returns
Eurekahedge North American Hedge
2.08 3.06 13.67
Fund Index
Eurekahedge European Hedge Fund
0.57 1.37 9.06
Index
Eurekahedge Eastern Europe & Russia
1.66 5.50 16.69
Hedge Fund Index
Eurekahedge Japan Hedge Fund
1.92 3.01 8.27
Index
Eurekahedge Emerging Markets
-0.33 -0.72 10.76
Hedge Fund Index
Eurekahedge Asia ex-Japan Hedge
-0.83 -2.32 10.80
Fund Index
Eurekahedge Latin American Hedge
0.09 0.02 9.84
Fund Index

Strategy Indices

All strategic mandates registered positive returns for February, with

distressed debt managers once again coming out on top and extending
their winning run into a sixth consecutive month. The increased risk
appetite and the rallies in equity markets also translated into gains for
high yield – the Merrill Lynch US High Yield Index was up 1.34% during
the month while the average distressed debt manager raked in gains of
2.11%. CTA/managed futures funds also witnessed some hefty profits,
gaining 1.90% in February as energy and precious metals witnessed price
jumps due to political tensions in the Middle East – the S&P Goldman
Sachs Commodity Index was up 3.75%. Long/short equity managers also
finished the months with strong gains, up 1.14%, capitalising on the
buoyant equity markets.
Table 3: Strategy Indices
Feb 2011 2011 2010
Index
Est1 Returns Returns
Eurekahedge Arbitrage Hedge Fund
0.95 1.86 9.15
Index
Eurekahedge CTA/Managed Futures
1.90 1.10 12.33
Hedge Fund Index
Eurekahedge Distressed Debt Hedge
2.11 3.94 21.66
Fund Index
Eurekahedge Event Driven Hedge 0.58 1.04 15.51

2
 Index Flash

Hedge fund assets cross US$1.7 trillion for the 1st time
since Sep-08

Fund Index
Eurekahedge Fixed Income Hedge
0.72 1.50 9.93
Fund Index
Eurekahedge Long/Short Equities
1.14 1.55 10.17
Hedge Fund Index
Eurekahedge Macro Hedge Fund
0.60 -0.08 7.83
Index
Eurekahedge Multi-Strategy Hedge
0.49 0.55 9.72
Fund Index
Eurekahedge Relative Value Hedge
1.09 1.51 11.41
Fund Index

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1
Based on 39.15% of the funds reporting their February 2011 returns as at 9 March 2011.

2
The MSCI World Index Free – Local Currency.

3
Not including Eastern Europe and Russia - it is a relatively new region for hedge funds with a
small number of funds.

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