February Sees Lower Hedge Fund Redemptions

There were fewer redemptions in February 2009,($11 billion) compared to January,($30 billion), according to preliminary reports from Eurekahedge, pointing towards the easing of redemption pressures for hedge funds in the future.

The Hedge Fund Index was down 0.5% in February suggesting another month of loss mitigation and strong relative outperformance – The S&P500 was down 11%.

Interestingly, Eurekahedge says, fund of funds managers (-0.2%), on average, have now outperformed hedge fund managers for the first two months of 2009 after 12 months of consecutive underperformance for 2008.

Latin American funds were the only ones to finish the month with decent gains (0.7%), as managers in the region were afforded opportunities with the weakening of most regional currencies against the US dollar, among other things during the month.

Connecticut To Raise Accredited Hedge Fund Investor Standard

The Banks Committee of the Connecticut General Assembly voted yesterday to pass a bill that will raise the minimum financial qualifications for hedge fund investors to $2.5 million and for institutional investors, $5 million.

If the bill, called "An Act Concerning Hedge Funds" is passed by the Connecticut General Assembly, it may become effective as early as October 1, 2009.

This marks a substantial increase above the minimum investor assets ($1 million) required under existing federal standards, making it harder for hedge fund managers in Connecticut to raise capital.

The Connecticut Bill was one of three bills introduced in mid-February to the legislature for consideration by the Banks Committee of the Connecticut General Assembly. Two other bills cover financial disclosure and licensing requirements, they up for vote in the near future.