Non-U.S. funds top list of best performing hedge funds: Preqin data

[February 08, 2017]  By Svea Herbst-Bayliss

BOSTON (Reuters) - The United States has been home to the world's biggest hedge funds, but the industry's most consistent strong performers generally hail from other nations, according to data released on Tuesday.

Mauritius-based Arcstone Capital's Passage to India Opportunity Fund, Great Britain-based Stratton Street Capital's Japan Synthetic Warrant Fund and India-based Fair Value Capital Management's India Insight Value Fund rank as the three top performing hedge funds over the last three years, according to research firm Preqin.

None are household names but at a time investors are searching for a crop of new winners, institutional investors are examining the list closely.

Arcstone Capital's fund posted an average 44.84 percent return while Stratton Street Capital's fund had an average 36.4 percent gain followed by Fair Value's 35.9 percent annual return.

Over the last five years, Taiga Fund Management, based in Oslo, Norway, ranked as the most consistent best-performing fund that selects stocks, Preqin said. Rio de Janeiro, Brazil-based Oceana Investimentos followed in second place in the stock-picking category.

Preqin ranked the funds based on their annualized returns and how volatile the funds were. Preqin also included funds' Sharpe ratios which calculate how much return investors can expect for the amount of risk they take and their Sortino ratios, which calculates return in relation to volatility to the downside, in the tallies.

The best-performing U.S.-based funds include Loyola Capital Management, based in Lake Forest, Illinois, which was last year's fourth-best performer with a 125 percent return.

New York-based Extract Capital, which specializes in the mining and energy sectors, posted a 102 percent return last year and returned an average 32.7 percent between 2014 and 2016.

To be sure many of these funds are tiny - some have less than $100 million in assets - and many pursue niche strategies.

The average global hedge fund made 5.51 percent last year after having lost money the year before, data from Hedge Fund Research show.

(Reporting by Svea Herbst-Bayliss; Editing by Cynthia Osterman)

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