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9 Mar 2010

Hedge funds up 0.52% in February

New York ( - Hedge funds returned to positive territory in February 2010 according to a preliminary Eurekahedge report. There were approximately 90 hedge fund launches globally in 1Q2010. With arbitrage hedge funds delivering 15 consecutive months of positive returns, gaining 26.23% since November 2008.

Hedge fund returns across most regions were marginally positive for February; however, early reports showed that North American managers, who make up 65% of the hedge fund universe, posted impressive gains of 1.41%. Regional managers capitalised on the marked improvements in market sentiment on the back of some strong earnings reports, positive movements in the US dollar and commodities as well as improved manufacturing data and the Fed’s decision to maintain low interest rates

Latin American funds were also positive with a 0.48% returns in February while Asia ex-Japan and Japan funds returned nominally positive performances. Continued problems in the eurozone led to negative results by the region’s managers, who were down 0.66% in February as the euro weakened amid speculation of Greece’s sovereign debt default.

The composite Eurekahedge Hedge Fund Index gained 0.52% during the month as the underlying global markets posted a recovery from a disappointing January. The MSCI World Index was up 1.23% in February, bringing its YTD figure to -3.01%.

The Eurekahedge CTA/Managed Futures Hedge Fund Index was up a strong 1.27% during the month. Continued low interest rates in the US also helped managers in the bonds sector to deliver yet another month of positive results. Fixed income, arbitrage and relative value hedge funds were all up during the month while distressed debt managers were flat to slightly negative.

Minnesota Hedge Fund Manager Petters May Face Double Madoff Term

HedgeCo News - U.S. prosecutors yesterday recommended a sentence of 335 years in prison for hedge fund founder Thomas Petters, more than twice the term given to Bernard Madoff, according to Bloomberg. Petters was charged with mail and wire fraud, money laundering and obstructing justice.

A federal judge in Minneapolis ordered Petters to be held without bail in October 2000, after a taped phone conversation revealed that the disgraced entrepreneur planned to leave the country.

Petters and his hedge fund, Petters Group Worldwide LLC was convicted in December 2000, of all 20 criminal counts, adding up to a $3.5 billion fraud.

“The defendant’s fraud is staggering and unprecedented in size and impact on victims and the community,” prosecutors said, according to Bloomberg.

The case is U.S. v. Thomas Joseph Petters, U.S. District Court, District of Minnesota. The final sentencing is set for April 8th.