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Hedge Funds' Tough March

Hedge funds won't be too upset to see March in their rearview mirror. According to a blog posting from The Wall Street Journal, Japan's earthquake and tsunami had a big impact on the $2 trillion industry.

"Hedge funds had a challenging March," wrote Mary Ann Bartels, who tracks industry activity at Bank of America Merrill Lynch.

WSJ reports the following highlights or lowlights for hedge funds last month:

- Investable hedge-fund indexes tracked by Bartels lost 0.91% last month, through March 30, while the Standard & Poor's 500 index rose 0.08% in the same period.

- Equity market neutral and event-driven managers were the best performers in March, while long/short equity funds and trend-following funds known as commodity trading advisers, were laggards, according to Bartels.

- David Einhorn was down 2% in March, making it his toughest first quarter since 2007, according to Greenlight Capital Re (GLRE). This leaves him 3.4% down in the first quarter of 2011, according to Greenlight Capital Re's website.

- Man Group's AHL Diversified Futures fund lost nearly 5% between March 1 and March 28, according to regulatory filings.

It's not all bad news, however. Hedge funds that trade around corporate events, such as Dan Och's Och-Ziff Capital Management Group and Dan Loeb's Third Point, had a good month. Och-Ziff's (OZM) largest hedge fund-- the OZ Master Fund -- returned 0.48% last month, leaving it up 3.36% so far in 2011, according to a regulatory filing.

Third Point Offshore, a $3.3 billion hedge fund, returned 0.9% last month. The gains generated by Third Point leave the hedge fund up 8.6% so far in 2011, versus a 5.9% gain by the S&P 500, according to the filing.

Let's see if April is a month of growth or an extended winter. Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio

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