After the very strong and correlated returns of March, sovereign debt issues in "emerging" Europe saw the market jittery but displayed an underlying resilience. Most indices ended flat, with resources hardest hit (but at -1.6% that is essentially flat for such a volatile index), said Peregrine Prime, a South Africa based hedge fund manager.

In its monthly report, Peregrine Prime figures indicate that equity-centric hedge funds delivered on average 1.35% for April, bringing the 2010 YTD indexed performance to 107.05. The overall median was lower at 0.91%, and strategy-specific returns were as follows (multi-strategy funds absorbed into long-short).

Peregrine Prime, the prime services subsidiary of Peregrine Equities, has increased AUM by 45% over the last 12 months.

"After 8% returns in March, one might have predicted that even in the absence of any negative news in April there would have been a slight pausing for breath in the markets. In this light the flat returns of the month may perhaps be taken as an indicator of some resilience in the markets," said the report.

It added that part of the reason for this is that the European debt crisis, sparked by downgradings of debt in Greece, Spain and Portugal, came, after an initial panic, to be seen as somewhat contained.

Some scepticism emerged with regard to the rating agencies, who were seen to be covering their backs as they come under increasing regulatory scrutiny for their part in the 2008 fiasco. And with that the possibility of broader contagion came to seem less likely.

However, it would be unwise to treat the events of April as mere blips in the recovery, said the report. They should serve as reminders that there remain very large structural problems in the global economy, like deep tectonic stresses which may at any moment erupt.