Gains from hedge funds were extended in March, tracking US equity performance, which also increased to conclude 1Q 2013 at record levels.

The HFRI Fund Weighted Composite Index closed 1Q13 with a net asset value (NAV) of 11,482, surpassing the previous peak set in April 2011, concluding a 20-month drawdown in 1Q and creating a new performance high watermark for the industry.

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An investment of US$1,000 in the hedge fund industry at the start of 1990, as represented by the HFRI, would have grown to US$11,482 as of the end of 1Q13, an 11.5x increase. A similar investment in the S&P 500 would have grown by approximately 7.3 times.

March gains were led by Fixed Income-based Relative Value Arbitrage strategies, with the HFRI Relative Value Arbitrage Index gaining +1.5 percent in the month and +3.8 percent for 1Q13.

RV gains were driven by credit multi-strategy and yield alternative exposures (including MLPs), with the HFRI RV: Multi-Strategy Index gaining +2.9% in March and +5.2% for the quarter, while the HFRX MLP Index gained +15.4% for 1Q13.

Equity Hedge led strategy gains for 1Q13, as the HFRI Equity Hedge Index gained +1.5% in March and +5.3% for the quarter; Fundamental Value strategies advanced +7.2% in 1Q while HFRI EH: Technology/Healthcare Index gained +6.3% for the quarter.

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As a direct result of the dynamic and robust environment for corporate transactions and increased shareholder accountability pressures, Event Driven hedge funds also made positive contributions to industry performance, with the HFRI Event Driven Index gaining +1.0% for March and +3.8% for 1Q13. Hedge Funds focused on Special Situations advanced +4.7% for the quarter, while Activist managers gained +8.6% in 1Q13.