Subject: FW: Prime Services' Monthly Hedge Fund Industry Update - January 2011
From: "Neil Callahan" <[email-masked]>
To: "Firmwide" <[email-masked]>
Date: Mon, 24 Jan 2011 21:56:29 -0500
List-Id: <all.rosemontseneca.com>

From: Jacknow, Bret [mailto:[email-masked]] 
Sent: Monday, January 24, 2011 7:05 PM
To: Jacknow, Bret
Subject: Prime Services' Monthly Hedge Fund Industry Update - January 2011

Attached please find the PDF which complements the Monthly Hedge Fund
Industry Update call. 

<<Credit Suisse January 2011 Call.pdf>> 

The Investor Perspective 

.         Sentiment & Flows: The combination of strong recent performance
and continued inflows positions managers well for a positive marketing
environment in 2011, as we expect institutional investors to continue to
implement their allocation plans.

.         Performance: Led by Managed Futures at +5.42%, the industry's
December return of +2.90% leaves hedge funds up 10.95% for 2010, with 11 of
13 sub-strategies in positive territory. Hedge funds had strong
risk-adjusted returns, with a 2010 Sharpe of 1.82 versus 0.57 for equities
and 0.75 for bonds, and also had the highest Sharpe among broad asset
classes for the last decade.  

.         Strategy Appetite: While both Emerging Market Equity strategies
and Event Driven funds remain highly sought after, we have observed a
rebound in interest in Macro strategies, perhaps reflecting the dispersion
in macro managers' 2010 performance. 

The Risk Perspective 

.         Gross Leverage: The overall gross market exposure of our book
continued to decrease, although only marginally, from 2.54x to 2.52x,
although Relative Value funds increased their gross market exposure over the
month.

.         Equity Long/Short Bias: Long/Short Bias continued to rise in
December (i.e. funds getting more 'long' during the month) and stood at 62%,
a continued increase since August and a 2010 high.

.         Regional Long/Short Bias: Long/Short bias increased in Europe and
Emerging Markets, while in North America and Asia Developed, bias was
slightly down.

.         Sector Long/Short Bias: Year-end bias was positive across the
board, after both Utilities and the Index/ETF sectors moved back into
positive territory. There were no significant declines in bias for any
sector this month and the largest upward moves were observed in Consumer
Discretionary, Health Care, Telecom and Industrials.

Call Replay Details: 
United Kingdom 0800 917 2646 
United States 1 800 642 1687 
Switzerland 0800 563 744 
Singapore 800 101 1464 
Hong Kong 800 930 800 
Australia 1800 002 633 
Replay available through February 19th, 2011 
Replay ID 34304694 

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