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Bloomberg David Tepper, president of Appaloosa Management LP, one of a few prominent hedge-fund managers announced that he would convert to a family office in 2019
Hedge funds returned 6.96%, on average, throughout 2019, according to data out Thursday, lagging behind gains enjoyed in the broader stock market.
The data come from Eurekahedge, which compiled hedge fund performance across four regions and nine strategies, with 85% of hedge funds reporting their November returns as of Dec. 31.
The strongest gains in all regions were found among long-short equity funds, which returned 8.64%. In contrast, the Dow Jones Industrial Average DJIA, +0.82% gained 22.3%, the S&P 500 SPX, +0.52% gained 28.9%, and the Nasdaq Composite Index COMP, +1.03% jumped 35.2% over the course of 2019.
While the broad aggregate averages reported here conceal lots of individual variation, it has been a tough year for hedge funds. Big-name investors like David Tepper converted his fund into a family office, returning all outside money back to his investors. Mick McGuire and Louis Bacon, meanwhile, recently closed their funds, with Bacon citing “disappointing results.”
Globally, investors have pulled $131.8 billion out of hedge funds last year, Eurekahedge said, nearly $59 billion of which was in North America. In contrast, throughout most of 2019, investors plowed approximately $660.8 billion into exchange-traded funds, approximately 98% of which are passively managed investing tools. (That data come from the Investment Company Institute, and represents total exchange-traded fund assets as of November 30, 2019, compared with total assets 12 months earlier.)
