Aviva Investors' High Growth Shares Fund lost -5.7% in November, while their Sustainable Investment Fund lost -6.5%.

The High Growth Shares Fund invests is an equity long/short fund which invests in Australian shares. This result brings its one year return to -34.7%, compared to its benchmark (S&P/ASX 200 Accumulation Index) which returned -40% in the same period.

The Sustainable Investment Fund invests in a diverse portfolio of Australian shares, based on their sustainability in terms of environmental, social and corporate governance issues. November's return brings the fund's one year performance to -34.6%.

Absolute Asset Management's Macro Diversified Fund (USD) returned -2.37% in November, bringing their YTD performance to -24.62%. This compares favourably to the MSCI's YTD return of -43.81%.

During November Absolute observed that most markets remained weak, but are optimistic that opportunities will present themselves in 2009. Unlike other hedge fund managers Absolute has not been affected by mass redemptions, so has been able to maintain liquidity in the fund while at the same time pursuing a macro diversified strategy.

Absolute's other funds experienced mixed results in November. Their Asian REIT Property Fund was down -3.48%, while their Trading 1 Fund, which trades in the FX market, was up +0.76%.

TechInvests’ flagship Intercept Capital fund lost just 0.05% in November, protecting almost all of the 14.9% it has gained over the past 12 months. Since inception in March 2004 the fund has generated an annualised post-fee return of 10.1% which compares favourably with its benchmark, the UBS Australia Bank Bill Index, which has generated an annualised return of 6.4% over the same period.

At the end of November the fund was invested in 32 companies the manager considers undervalued and held short positions in 13 companies the manager believes are overvalued. The manager reports that during the month short positions generally contributed positive returns while most long investments detracted from the result.

Everest Babcock & Brown's Alternative Investment Trust returned -7.86% in November, bringing its YTD performance to -35.53%, compared to the benchmark HFRX Global Hedge Fund Index YTD return of -22.22%.

This result follows on from heavy losses in the fund in October, and was a result of poor performance across all strategies. In their monthly report the managers note the ongoing dislocation of equity and credit markets as a key factor in the fund's performance. They also discuss the impact of redemptions in a number of their underlying funds, and how have been actively managing the risks to the fund on this issue.

Agora's Absolute Return Fund was down -3.19% in November, compared to the S&P/ASX 200's return of -6.20% in the same period. This result brings the fund's YTD performance to -14.05%.

Agora is expecting economic indicators to remain negative into 2009, and is thus continuing to be conservative in its approach, i.e. they will continue to operate with a low level of exposure to the equity market. Agora's leveraged Absolute Return Fund returned -4.02% in November, and is down -12.98% YTD.

Pengana’s Global Small Companies Solution fund lost 1.7% in November and has fallen 34.2% over the last three months. The fund benchmark is an equally weighted combination of returns available from each of the three geographic regions that it invests in: North America, Europe and Asia. The fund outperformed this measure by 6% in November but has underperformed by 1.2% over the three months.

The manager believes that small companies are now attractively priced with good potential in the Asian region. Research conducted by Pengana shows that values have fallen sharply while earnings remain relatively healthy so the manager will be looking to add another Asian small cap specialist to its team over coming months.

Antipodean Capital's Volatility Arbitrage Strategy returned +3.82% for November, bringing their YTD performance to +13.68% and their annualised return since inception (December 2007) to +24.54%.

This result was attributed to positive returns in the fund's equity and FX derivatives strategies. Antipodean's CTA Strategy also posted a positive result for November (+1.21%), while their $A Currency Strategy returned a small loss of -0.11%.

Although too early to say definitively, it is hoped that direct repercussions (i.e., Investments) by Australian hedge funds, fund of funds and other local investors in former US "Investment Guru" Madoff's so called "Ponzi" scheme will be minimal.

As of 15th December, two local Fund of Funds, Everest, and Select/Gottex have categorically denied having any investment or exposure to Madoff's extraordinary US$50 billion fraud.

However, there is no doubt that further confidence will be eroded in the eyes of ordinary investors in the top end of town, with this scam following on a series of disasters involving both overseas and local former high flying names.

Equally expect the surveillance of unregulated funds (a greater issue in the US than Australia) by the authorities to increase significantly.

Macquarie has written to investors with the news that as of 28th November, redemptions in their Equinox Series Fund of Funds have been suspended until further notice. Redemptions for 31 October will be processed, but all others, including those for November 28th, are included in the suspension.

Macquarie's letter to Equinox shareholders cited difficult (but now well known) issues affecting underlying managers, who themselves have been limiting or freezing redemptions. This poses a major issue for the Fund of Funds model with liquidity dependent on underlying assets which are themselves illiquid.

As a result there is, and will continue to be, a "cascade" effect as investors seek liquid assets, which in themselves are becoming an increasingly rare commodity.

Macquarie also noted other reasons for the problem, including falling interest rates damaging the mechanism for capital protection, and a falling Australian dollar affecting the value of predominantly US$ underlying investments, as well as impacting the A$/US$ currency hedges employed. Finally, the portfolio employed leverage between 10% and 20% of NAV, and this loan facility had been withdrawn and in current conditions was unable to be replaced.

Absolute Return funds surveyed by Australian Fund Monitors (AFM) that have reported November results indicates it was a
much improved month for the industry with quite diverse results. To date the average return for the month is negative 2.51% with 37% of funds in AFM's database having reported.

The best performing strategies have again been non equity based (i.e. Global Macro, Commodities, Currencies and
Managed Futures). Equity based strategies have suffered less than in September and October, significantly outperforming
the S&P/ASX200 Accumulation Index and the S&P500 Total Return Index which fell 6.20% and 7.18% respectively for the
month.

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