First the good news: Let's say your hedge fund is up 50% this year. Now the bad news: That same fund was down 25% in 2008. As an investor you are pretty much back to where you started. The fund manager isn't euphoric either, as that accounts for two years with no performance fees.

The hedge funds we like best this year are those that have recorded consolidated two-year growth.

The top five in that category for the 2008/2009 period are, according to Eurekahedge:

1. Phalanx Japan AustralAsia Multistrategy Fund: up 50%

2. Vegasoul Fund: up 41.4%

3. Triskele China Fund: up 24.4%

4. Segantii Asia-Pacific Equity Multistrategy Fund: up 22.8%

5. Riley Paterson Asian Opportunities Fund: up 22.6%

That's a mixed bag of strategies, including CTA, long/short equity, multistrategy and Greater China. Those that are doing well performance-wise this year are also pulling in the new investor funds that are up for grabs.

"We've had inflows of $110 million in the last three months," says Otto Chan, CEO of Triskele Capital in Hong Kong. His colleague, CIO Shiba Tsuyoshi, adds: "For most of 2008, we were market neutral, but then raised our net exposure positions to 60-70%."

All on the list above are AsianInvestor award winners either this year or in the year before, which puts the kibosh on the superstition that hedge funds get jinxed by awards.

Top performer is Phalanx Capital Management, which won awards in 2006 and 2008, so on their law of even numbers, seems set fair for 2010.

"Through September 2009, the Phalanx Japan AustralAsia Multistrategy Fund has had 17 consecutive positive months," says Chris McGuire, CIO of Phalanx. "Over that time period, Phalanx made money when the market crashed and then again when it rallied in 2009, profited when credit spreads widened as well as when they tightened, and also was successful when the Vix went above 80% and also when it fell back to 20%. Thus, our market-neutral, diversified and dynamic volatility fund has made its way through treacherous waters."

We will be looking at hedge fund 2008/2009 performance in the December edition of AsianInvestor, finding out just what the above managers did stylistically in order to secure those performance returns and talking to more of the managers whose successes span the two-year period.