Benzinga's Daily Hedge Fund Briefing - More Statistics Show Hedge Funds Had a Banner Year in 2009

December and 2009 year-end results for the USA's biggest hedge funds are starting to trickle in, and DealBook has obtained some of the numbers. Hedge Fund Research, which tracks a number of funds, said its index of fund returns gained 1.25 percent in December, bringing last year’s gains up to 20.04 percent.

Take a look at the list of last month’s returns for more than a dozen funds, including funds run by Steven A. Cohen and Paul Tudor Jones, as well as how the funds are doing for the year to date. We’ll be updating this list, which appears on the jump, as more funds report their gains or losses for the month. Source

Hedge funds returned 13.4% in 2009, according to Hedge Fund Research’s HFRX Indices. The HFRX Global Hedge Fund Index added 0.55% in December to close out the year. December’s returns were driven by distressed securities funds, which returned 3.49% on average during the month. But that wasn't enough to save the strategy from a year in the red, as distressed funds ended 2009 down 5.6%.

By contrast, last year’s standout strategies were all arbitrage: convertible at 42.46% (2.36% in December), multi-strategy relative value at 42.05% (3.46%) and relative value at 38.47% (2.82%).

Early estimates indicate the Credit Suisse(NYSE:CS)/Tremont Hedge Fund Index ("Broad Index") will finish up +0.39% in December 2009 (based on 62% of assets reporting). Hedge funds finished their best year of the decade with positive performance in December. Top performing sectors included Event Driven, Long/Short Equity, Emerging Markets and Convertible Arbitrage.

Event Driven managers capitalized on their credit books as high yield and leveraged loan markets spreads tightened. Managers also seized opportunities in select idiosyncratic distressed situations. Long/Short Equity and Emerging Markets experienced positive performance in the final month of the year with performance largely propelled by rallies in Japanese and certain European equity markets. Following early gains, many managers took risk off the books as markets slowed down in the second half of the month.

Meanwhile, Pengana Capital, a hedge fund group backed by Australian banking major National Australia Bank (OTC:NABZY) says its profits more than halved during the global financial crisis.

Net profit for the 12 months to June 30 fell from $21.3 million to $8.5 million while revenue declined by 62 per cent to $11.2 million. In May 2008 NAB emerged as one of the hedge fund group’s largest shareholders when it acquired a 35 per cent stake in the asset manager from then opposition leader Malcolm Turnbull. Source

Tail Piece: Do hedge funds have an impact on energy trading? While the answer might seem intuitive, the debate as to whether they actually do has come to resemble the medieval theological dispute about how many angels can dance on the head of the pin.

Because, like angels, many trades in energy futures are invisible, and it's often not possible to pinpoint where they take place.And yet, for most of us, including lawmakers on Capitol Hill, it seems obvious that when hedge funds buy and sell billions of dollars worth of oil and gas futures, it must be having an impact on energy prices. Source