HedgeFund.net (HFN): Hedge Funds Fall in March; First Negative Q1 on Record

Sharp rise in volatility and commodity price dips hurt many
strategies in March
NEW YORK--(Business Wire)--
Early estimates show the HFN Hedge Fund Aggregate Average, an
equal weighted benchmark of all single manager hedge funds and
CTA/managed futures products in the HedgeFund.net database, was -1.35%
in March 2008. The HedgeFund.net database consists of over 8,000
current hedge fund, fund of funds, and CTA products.

The majority of hedge fund strategies lost ground in March
contributing to the first negative Q1 performance on record. Increased
volatility surrounding the ultimate failure of investment banking
giant Bear Stearns and the ensuing U.S. Treasury actions defined a
difficult month. Despite the negative performance, Q1 2008 produced
the largest quarterly outperformance by hedge funds over equity
markets since 2001.

Unlike February when emerging markets and rising commodity prices
supported hedge fund outperformance of equity markets, in March the
major winners were short biased funds, volatility related options
strategies and the relatively insulated asset based lending
strategies. The HFN Short Biased Average was +2.24% in March and
+11.04% YTD; the short sellers' benchmark's best Q1 since 2001. ABL
funds returned an average of +0.92% in March and +2.30% in Q1 while
the HFN Options Strategies Average was +2.49% in March and +3.04% in
Q1.

The drop in non-energy related commodity prices hurt funds in the
HFN CTA/Managed Futures Average, -0.71% in March, yet +7.28% YTD.
Energy sector funds also lost ground in March despite natural gas
prices rising and oil prices near flat. The HFN Energy Sector Average
was -4.81% in March and -6.59% in Q1.

Emerging markets experienced a sell-off in March led by funds
investing in China, India and the Middle East/North Africa region,
which was hurt by funds investing in Turkey. The HFN Emerging Markets
Average was -2.36% in March and -4.27% in Q1. HFN's newly launched
regional and country specific benchmarks show funds investing in China
were -6.13% in March and -13.28% in Q1 while those investing in India
were -12.52% in March and -25.49% in Q1.

Distressed strategies did not fare well in Q1 2008. The HFN
Distressed Average was -1.28% in March and -4.13% in Q1; their worst
Q1 on record and the worst quarterly result since Q4 2000. Much is
expected from distressed funds in 2008, but the results thus far
indicate the environment has yet to produce favorable returns.

The first quarter of 2008 has shown where the weaknesses lie
within hedge funds, but more significantly shown the broad number of
funds able to provide relative outperformance over more traditional
investments. As in 2001 and 2002, 2008 may likely be reflected on as a
time when hedge funds separated themselves from equity markets as
providers of long term absolute returns.

A full report on March performance will be available at
www.hedgefund.net later in the month.

The table below is a summary of March 2008 returns for a selection
of HFN Averages:

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*T

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Last 12
HFN Aggregate Averages March* Q1 2008** Months**
HFN Hedge Fund Aggregate Average -1.35% -2.08% 5.63%
HFN Regional Averages***
HFN Asia Average -3.67% -8.05% 2.99%
HFN Europe Average -1.51% -3.68% -0.36%
HFN North America Average -0.84% -2.15% 3.87%
HFN Global Average -1.15% -1.13% 6.29%
HFN Single Strategy Averages
HFN Convertible Arbitrage Average -1.14% -2.04% -0.99%
HFN CTA/Managed Futures Average -0.71% 8.47% 23.81%
HFN Distressed Average -1.28% -4.13% -2.74%
HFN Emerging Markets Average -2.36% -4.28% 11.71%
HFN Energy Sector Average -4.81% -6.58% 4.18%
HFN Event Driven Average -0.64% -3.04% -0.72%
HFN Long/Short Equity Average -1.75% -4.71% 2.92%
HFN Macro Average -1.58% 0.35% 10.90%
HFN Market Neutral Equity Average -0.68% -0.61% 4.06%
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*T

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*Estimated results of funds reporting March 2008 performance as of
April 09, 2008
**Estimated results for all funds having reported performance as of
April 09, 2008
***Regional averages derive performance from returns of funds
investing primarily in those regions.
*T

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS

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For HedgeFund.net
Channel Capital Group Inc.
Joel Schwab, 212-381-8065
Managing Director
joel.schwab@hedgefund.net

Copyright Business Wire 2008