Hedge funds likely managed a positive return of about 0.80% in January, based on prelimary data from the Credit Suisse/Tremont Hedge Fund Index.

Relative value managers (such as convertible arbitrage, fixed income arbitrage, and equity market neutral strategies) were generally up for the month, buoyed by improving credit markets and central bank interventions, the index provider says.

“After facing very significant technical and fundamental difficulties in 2008, convertible arbitrage managers overall had a strong month as appetite for corporate bonds improved and crossover buyers emerged,” it says. “Event driven managers saw the first signs of a rebound in six months – on the credit side, the liquid portion of high yield bonds moved because of a demand for yield, and some buyers emerged for illiquid parts of the market.”

The firm also notes that many global macro managers started the year on a strong note, profiting from the steepening yield curves and strengthening of the U.S. dollar.

Estimates are based on 58% of assets reporting; final January performance will be published February 17.

IE