Navigating the Hedge Fund Maze – January 2010

January hedge fund news was mostly good, and for two reasons: The end of a rebound year and the end of a (mostly) great decade. Across the board hedges fared better than most others in the market place. According to the Hennessee Group, the Hennessee Hedge Fund index gained 88.3 percent from January 2000 to December 2009, compared to heavy losses across major indexes. The same indexes were able to pull ahead of hedges for 2009, but both parties still saw impressive gains.

There are a couple snags going forward. Investor confidence is still suffering from the financial crisis, which continues to plague hedges even after a strong 2009. There's also a whole batch of new SEC regulations just around the corner, so it’s bound to get tougher.

The Galleon insider trading case has also seen a very dramatic month. Raj Rajartnam's lawyers successfully continued to block prosecutors' use of wiretap recordings obtained by the SEC. Another witness has also agreed to testify against Rajaratnam. It only gets uglier.