Market volatility has prompted an increasing number of hedge funds to leave assets in cash. According to Horizon Cash Management's second survey of hedge-fund trends, not only is cash growing as a percentage of total assets - up to 20% of the portfolio in some cases - but surprisingly few hedge funds use performance benchmarks to gauge returns, writes Niki Natarajan.

Diane Mix, president of Chicago-based Horizon, says: 'Hedge-fund managers seem to be keeping their powder dry. The bad news is that they're not using the best tools available to make these cash balances work for them and their investors.'