The AIMA Australia Hedge Fund awards held last night highlighted 15 of the leading hedge fund managers in the country, with one awardee returning 39 per cent and another gaining as much as 265 per cent in the last 12 months.

Admittedly it's been a tough year for fund managers, particularly hedge fund managers, after the litany of hedge fund blow-ups in the US due to the liquidity and market crises.

But the shortlist of fund managers recognised at the event suggests that amid the disaster, there are those that stayed true-to-label, delivering positive returns while the markets are down.

"We do what hedge funds are supposed to do, which is actually to make money in negative markets," said Tim McGowen, chief executive of Fortitude Capital, winner of the top gong, Australian Hedge Fund of the Year award.

While the market fell 40 per cent since the fund's inception in 2005, Fortitude's Absolute Return trust gained 11.27 per cent over the same period and delivered 9.32 per cent net of fees in the last financial year.

Meanwhile, Best Emerging Manager award winner, Kapstream Absolute Return Income Fund manager Kumar Palghat (previously head of portfolio management, Asia Pacific, for PIMCO Australia) said he kept his strategies simple over the year.

"In July last year, the markets looked pretty bad so we brought all our assets back to Australia so that we only own Aussie debt today."

He continued, "I think the RBA is making a mistake cutting interest rates so if I can buy [fixed income] assets between 8.5 and 9 per cent that are double-rated then for the next three to five years, my clients will earn at least 10 per cent…sometimes it's better to keep it simple to make good returns."

More than 200 funds were judged based on their performance over the last three years with a high 60 per cent weighted on how they managed money in the last 12 months.

Given these criteria, one of the funds that prove to be the year's superstar is Mathews Capital Sabre Fund, named the world best performing hedge fund for the last five years and in the last year according to Bloomberg. The homegrown manager gained 265 per cent over the last 12 months and averaged 120 per cent per annum since 2002.

Also delivering impressive returns was fellow winner Bennelong Long Short Equity Fund which returned nearly 40 per cent in the 12 months to June and annualised 26.06 per cent since 2002.

AIMA chair Kim Ivey was also recognised last night for his contribution to the industry. He said that the awards offered a window to showcase local talent. One estimate pegs the hedge fund industry market in Australia at around $90 billion, a relatively small amount when compared to the multi-trillion dollar industry offshore.

And the winners this year are:

Australian Hedge Fund of the Year
Winner Fortitude Capital Absolute Return

Finalist Kaiser Trading Fund SPC
Finalist Bennelong Long Short Equity Fund

Best Emerging Manager
Winner Kapstream Absolute Return Income Fund

Finalist Pengana Global Resources
Finalist Macquarie Commodity Alpha SPC

Best Long Short & Absolute Return Fund
Winner Mathews Sabre Fund

Finalist H3 Japan Fund
Finalist Portfolio Partners High Growth Shares Trust

Best Market Neutral Fund
Winner Bennelong Long Short Equity Fund

Finalist Fortitude Capital Absolute Returns Trust
Finalist BGI Total Return - Australian Equity Market Neutral

Best Global Macro/Futures Fund
Winner Kaiser Trading Fund SPC

Finalist Apeiron Global Macro Fund
Finalist BlackRock Asset Allocation Alpha Fund - Class D

Best Investor supporting Australian Managers

Winner Telstra Super

Best Fund of Fund 2008
Winner Investor Select Advisors Global Opportunity Fund

Finalist Pioneer AllWeather (AUD) Absolute Return Fund
Finalist FRM - Absolute Alpha Fund PCC Limited Diversified (AUD)