It Was a Pretty Good Year: Cogent Dynamic Averages Show Alternative Investments Gain 8.737% in 2005

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With over 3050 alternative investments reporting results for the month of December 2005, the average hedge fund has gained 1.969% for the month. Alternative investments gained 1.959% on average in November. This strong close to the year brings average performance for the full year 2005 to +8.737%.

Cogent Investment Research LLC, the operator of the free CogentHedge online alternative investment information and performance analysis resource for investment professionals worldwide (, reports that as of January 19, 2006, and with over 3050 entities now reporting results for the full year, the Cogent Dynamic Averages for the major investment strategy classifications are as follows:

All Funds:

December: 1.968%

Full Year 2005: 8.736%

Single-manager ex futures funds:

December: 2.315%

Full Year 2005: 10.612%

All Single-manager funds:

December: 2.012%

Full Year 2005: 9.793%

Arbitrage strategies:

December: 1.336%

Full Year 2005: 4.905%

Event-driven strategies:

December: 1.765%

Full Year 2005: 8.371%

Fixed income strategies:

December: 0.851%

Full Year 2005: 5.414%

Long/short strategies:

December: 2.746%

Full Year 2005: 11.919%

Macro strategies:

December: 1.627%

Full Year 2005: 9.308%

Multi-fund strategies:

December: 1.861%

Full Year 2005: 6.874%

Sector strategies:

December: 3.833%

Full Year 2005: 20.966%

Trading strategies:

December: 0.123%

Full Year 2005: 4.369%

Alternative investments achieved extended November's broad gains into December. Five of the four dozen investment strategies tracked by the CogentHedge application (Managed Futures, Currency Trading, Credit Spread Arbitrage, Statistical Arbitrage and Short Selling Strategies) posted losses for the month. December's gain was a welcome positive extension to a troublesome year. While November showed a strong broad-based gain among the 4,484 alternative investments reporting for the month, the overall year showed a good deal of volatility among alternative investments.

This past year also saw a healthy turnover in the category. Unlike low estimates issued by some hedge fund data aggregators, we estimate that between 8%-12% of all alternative investment entities went out of business during the course of 2005 (including those that shut their doors following the year-end valuation). However, the overall universe of alternative investments also grew by at least 10.5% during that same period. The overall number of funds therefore remained steady for the year although their average size increased substantially due to a dramatic influx of capital.

The top ten investment strategies for the year are as follows:

Full Year 2005

% Gain


Emerging Market Equity Strategies


Regulation D Strategies


Opportunistic Trading Strategies


Industry/Sector Specific L/S Strategies


Growth Strategies


Index Arbitrage Strategies


General Long/Short Strategies


Opportunistic Equity Hedged Strategies


Value Strategies


Market Timing Strategies


Current data can be found at

For more information, come to Once registered as a qualified accredited investor, you will have full and free access to a comprehensive set of statistical analyses and performance metrics in respect of these investment strategies as well as all alternative investments in the CogentHedge database.

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David Slavin
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