Subject: FW: Prime Services' Monthly Hedge Fund Industry Update - May 2011
From: "Neil Callahan" <[email-masked]>
To: "Firmwide" <[email-masked]>
Date: Wed, 18 May 2011 14:05:01 -0400
List-Id: <all.rosemontseneca.com>

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Neil Callahan

Rosemont Seneca

401 Greenwich Street, Suite 400 | New York NY 10013 | 212-933-9965 |
212-796-4037

1010 Wisconsin Avenue, Suite 705 | Washington DC 20007 | 202-333-1880

917-945-9516 (mobile) 

866-749-8879  (fax) 

From: Jacknow, Bret [mailto:[email-masked]] 
Sent: Wednesday, May 18, 2011 1:56 PM
To: Jacknow, Bret
Subject: Prime Services' Monthly Hedge Fund Industry Update - May 2011

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

<<Credit Suisse May 2011 Call.pdf>> 

The Investor Perspective 

.         Sentiment & Flows: Overall inflows into the industry continued to
be strong in April, with most data sources now agreeing we have passed the
previous AUM peak after Q1 inflows estimated at between $30-50bn. Investor
focus may have broadened beyond "mega" funds, but we see this flowing into
mid-size funds with $500m-2bn rather than a dramatic surge into smaller
funds. April's strong performance bodes well for a continuation of these
allocations through Q2, but has also encouraged peer-group comparisons that
may spur re-allocations.

.         Performance: The Dow Jones Credit Suisse Hedge Fund Index returned
1.80% in April, leaving the index up 4.05% for the year. There was less
intra-strategy dispersion than in March, as 12 out of 13 strategies posted
positive performance, with Managed Futures leading the pack, up 5.40% for
the month.

.         Strategy Appetite: Long/Short Equity funds continue to be the most
heavily researched, but primarily those with an "active bias". Event Driven
is still of interest across all regions, but searches for Macro diverged
across the regions, as Macro remains at the top in Europe, while dropping in
US investors' priority lists recently.

The Risk Perspective 

.         Gross Leverage: Overall book gross leverage at April month-end was
up slightly to 2.74x from the March level of 2.72x.

.         Long/Short Equity Bias: Long/Short Bias was down in April to 60%
from 63%.

.         Regional Long/Short Bias: Long/Short Bias in April was down
significantly for Europe-developed region. Bias for North America and
Emerging Markets was down slightly. Asia-developed region was the only
region where bias saw an increase this month.

.         Sector Long/Short Bias: As of April month-end, sectors whose bias
increased relative to the previous month included Index, Consumer
Discretionary, IT, Energy and Utilities.

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 June 18th, 2011 
Replay ID 63738675 

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