The annual returns of three categories of hedge funds defined by size were negative in 2011, according to a new report.
PerTrac, a New York-based provider of analytics, reporting and communications software and services for investment professionals, disclosed this finding in the October 2012 release of “Impact of Size and Age of Hedge Fund Performance: 1996-2011.” The sixth annual version of the PerTrac’s analysis of the performance trends for funds of different sizes and ages, the study provides the most recent full-year data on hedge fund performance, plus information dating to January 1996 for historical and directional consideration.
The analysis defines a hedge fund as “small” if its assets under management are less than $100 million, “mid-size” if its assets are between $100 million and $500 million and “large” if assets managed exceed $500 million. The report defines a fund as “young” if its start date was within the last two years, “mid-size” if it has been within the last two to four years, and “tenured” if it has been operating for more than four years.
The report reveals that the average large fund declined least, dipping 2.63 percent, compared to the dips of the average small fund, down 2.78 percent; and the average mid-size fund, which fell 2.95 percent. The average large fund outperformed the average small fund in seven out of 12 months, and outperformed the average mid-size fund in eight out of the last 12 months.
The 2011 annual returns of all three hedge fund age categories were also negative, the research reveals. The average young fund declined by 2.18 percent, the least when compared to the 2.93 percent loss posted by the average mid-age fund and the 4.99 percent dip of the average tenured fund.
The average young fund outperformed the average mid-age fund in six out of 12 months and the average tenured fund in eight out of last 12 months, the report finds.