Waterstone’s flagship fund was up 2.72% in the month of January. The fund returned 0.75% in 2011. The hedge fund had a very impressive 2008, with a positive return of 12.07%.

The firm uses various types of arbitrage using a value based approach to investing.

The market neutral fund has assets under management of over 1.5billion today.

The fund managers are catious about 2012, and believe that the market is experiencing some irrational exuberance from investors. The hedge fund is 48% hedged currently.

Top holdings below:

Top 5 Net Exposures
Credit Ratings:
HOLX (NR) long convertible bond
AMD (B+) long convertible bond
LEH (NR) long corporate bond
NT (NR) long corporate bond
MAC (NR) long convertible bond