Convertible arbitrage was the best-performing hedge fund strategy in the first quarter, returning 4.6% through March 31, according to HFR Group LLC’s quarterly report. Distressed securities was second, returning 4.5%. Overall, the HFR Fund Weighted Composite index was up 0.81% in the first quarter. Emerging markets strategies had the most dollar growth, increasing by $450 million, net of performance, to a total of $19.9 billion.
The overall number of hedge funds declined slightly, with 100 funds closing their doors and 50 new funds opening, according to the report. That resulted in a decrease in total hedge fund assets to $618 billion, from $622 billion in the end of the fourth quarter. Funds of hedge funds saw a loss of $5 billion in total assets, to $204 billion. That followed a $40 billion surge in assets in the fourth quarter, HFR President Josh Rosenberg said.