If you’re in the hedge fund industry, you know the name Pertrac.  These are the guys who make the ubiquitous software platform that many hedge funds use to analyse and report performance to their investors.  Last March, the firm compared the performance of large ($500 million+), medium ($100 million-$500 million) and small (under $100 million) hedge funds to see if size determined success in Hedgistan.  They also compared the performance of young (under 2 years old), middle aged (2-4 years old) and seasoned (4 years old +) hedge funds.

Earlier this week, the company announced the updated results of the same study.  It came as no surprise to researchers that last year’s findings were reinforced.  Young funds and small funds did better than their larger and older cousins.  The chart below appears in the firm’s press release:

You don’t need to be a finance Ph.D. to see the parallels between this research and the work of Eugene Fama and Kenneth French on the “small-cap bias”.  Apparently, small cap stocks aren’t the only small things that tend to outperform.

More…