Hedge Fund Providers

As the hedge fund industry matures, the demand arises for benchmarks to compare the performance of hedge funds to one another and to compare hedge fund performance with other asset classes. Several third parties (such as CSFB-Tremont, Hedge Fund Research (HFR), Van Hedge, and Zurich Capital Markets/MAR) have filled the demand for hedge fund benchmarks by providing hedge fund indices.
Hedge fund index providers generally do not provide a single monolithic index, but instead provide separate indices for different hedge fund strategies. This approach groups hedge funds of similar size and correlation to the market. In addition, new categories may arise as hedge fund managers devise innovative trading strategies. However, the categorisation approach suffers because there is no industry-wide consensus on the definition of categories, so indices from different providers are not always comparable with one another.