By Saijel Kishan

Aug. 7 (Bloomberg) — Hedge funds gained for the fifth consecutive month in July, returning an average 2.4 percent as stock markets rose, Hedge Fund Research Inc. said.

Funds have climbed 12 percent this year after losing a record 19 percent in 2008, the Chicago-based researcher said today on its Web site.

The Standard & Poor’s 500 Index of the largest U.S. companies rose 7.4 percent in July, continuing its climb from a 12-year low in March. Emerging-markets hedge funds were the best-performing category last month, returning an average of 4.2 percent, according to Hedge Fund Research. Macro hedge funds, which profit from broad economic trends by trading everything from bonds to commodities, were the worst performers, rising 0.6 percent, the company said.

Hedge-fund assets grew in the second quarter for the first time in a year, to $1.43 trillion, as investment performance improved and customer withdrawals decreased, the research firm said. Industry assets peaked at $1.93 trillion in June 2008.

Serengeti Asset Management LP, the $600 million investment firm run by former Goldman Sachs Group Inc. executive Joseph Lanasa in New York, returned 8.2 percent last month, boosting its year-to-date gain to 52 percent, according to a report sent to investors.

Daniel Loeb, who runs New York-based Third Point LLC, returned 6.7 percent in July from his $1.1 billion Third Point Offshore Fund and 14 percent for the year, according to a report.

Kingdon Capital Management LLC, the $3.6 billion firm run by Mark Kingdon in New York, posted an average gain of 1.7 percent across its funds in July, bringing the 2009 return to 19 percent, according to an investor.

Officials at the firms declined to comment.

To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net

Last Updated: August 7, 2009 14:18 EDT

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