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Laxman Pai, Opalesque Asia:

According to a new research, the global hedge fund industry registered the worst performance in ten years in 2018 with 59% of funds posting negative returns as turbulent markets exacted a toll.

The Preqin All-Strategies Hedge Fund benchmark finished the year with losses of 3.42%, the lowest return the industry has seen since 2008.

"2018 was a difficult year for hedge funds, with market volatility and shifting investor sentiment creating challenging headwinds," said the report.

It further explained that: "Performance difficulties were widespread - 59% of hedge funds posted negative returns for the year, with 39% seeing losses exceed 5.00%.

After slowing growth in recent years, 2018 also saw a contraction in the number of active hedge funds, with liquidations exceeding launches.

A total of 746 funds liquidated through the year, down from 1,130 in 2017, but the number of funds launched fell sharply from 1,169 to 609.

"Strategies less correlated to equity markets - such as macro, relative value and credit funds - did manage to weather the storm and generate single-digit gains for the year. However, it's no surprise that the majority of investors feel underwhelmed by hedge funds' performance. Negative returns are also a key factor in the contraction of the industry - with many investors rebalancing their portfolios, managers with significant losses will be finding it even harder than usual to retain investor co......................

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