* Developed market equity, macroeconomic trend funds lag
* Commodity, emerging markets, U.S. stocks lead the gainers
* Trump, central bank policy to create opportunities in 2017
By Simon Jessop, Maiya Keidan and Lawrence Delevingne
LONDON/NEW YORK, Dec 23 (Reuters) - For some equity fundsand those betting on macroeconomic trends, which together makeup a large chunk of the $3 trillion global hedge fund industry'sassets, 2016 has been another year to forget.
Beset by investors pressing for lower fees and the dulling effect of central bank easy monetary policies, the biggestwinners were largely to be found betting on credit, a rebound incommodity, energy and emerging markets or the election-fuelledrun-up in U.S. stocks.
Those coming off worse included London-based Crispin Odey,whose Odey European fund was down around 50 percent by earlyDecember, and U.S.-based Passport Capital's John Burbank, whoseSpecial Opportunities fund was down 24 percent heading intoNovember.
The average diversified global equity fund had lost 4.8percent to early December, data from HSBC showed, while thosefocused on Europe had lost 4.7 percent.
The average so-called 'global macro' fund, which looks topick big macroeconomic trades right, was up just 1.8 percent,the data showed, while 'Systematic Global' funds, which usecomputer programmes to help trade, were down 2 percent.
At the top of the performance charts were some of thelaggards from recent years, including the U.S.-based DorsetEnergy Fund, whose bets on energy companies helped it risenearly 80 percent, buoyed by a 40 percent-plus jump in the price of crude oil.
The equity-focused Russian Prosperity Fund was up nearly 55percent, helped by gains of more than a fifth in theoil-exporting country's main stock market.
That left the average hedge fund of any stripe up 3.5percent by mid-December, data from industry tracker Eurekahedgeshowed, lagging a 4.5 percent gain in the MSCI World Index.
FEES FALL
Against that tough backdrop, the number of active fundsdipped below 10,000 for the first time since 2014, and theoverall average management fee charged as a percentage of assetsunder management fell to 1.5 percent, industry tracker HFR said.
More than half of the world's hedge funds employed an equityor event-driven hedge fund strategy, HFR said.
"Overall it has been a challenging year for hedge funds dueto a lack of net asset inflows into the industry and difficultperformance results," said Zeynep Meric-Smith, Co-Lead for UKHedge Funds at EY.
Martin Kallstrom, head of alternative investments at FirstSwedish National Pension Fund, which invests around $1.7 billionin hedge funds, said that had led some managers to be "quitehumbled", leading to a substantial reduction in fees.
"In some cases we have negotiated up to a 20 percentreduction in fees this year," he said.
A steepening of the U.S. yield curve, greater reliance onfiscal spend and the prospect of lighter regulation andcorporate friendly tax policies from President-elect DonaldTrump could lend support to many stock and bond funds in 2017.
"With central bank policy in the States at least looking tonormalise, (and) company fundamentals becoming more importantafter the rising tide of cheap money that lifted all boats,fundamental stock-picking will have more value," said SimonSmiles, chief investment officer for ultra high net worthinvestors at UBS Wealth Management.
Others likely to benefit include fixed income, as investorsare rewarded more for investing in riskier credits, andevent-driven funds, which could profit if Trump allows companiesto more easily repatriate earnings from overseas.
Darren Wolf, Head of Hedge Funds, Americas at Aberdeen AssetManagement said he expected 2017 to be "considerablybetter" for hedge funds.
"Irrespective of what the specific outcome is, there will bemovement on the regulatory and political front post-Trump'svictory," he said, pointing to the potential healthcarestock-boosting repeal of 'Obamacare', changes to rules limitingbank trading or those around energy regulation.
"These are all events that can confuse the market and createuncertainty and provide a ripe hunting ground for hedge funds,"he added.
BETTING ON DECLINE
Among the best-performing equity 'short' trades in 2016,where a manager bets on the price falling, were in smallhealthcare and biotech stocks, including Concordia International in the United States and Circassia Pharmaceuticals in Britain, data from Markit showed.
With the U.S. Federal Reserve flagging a quicker pace ofinterest rate rises and the European Central Bank set to trimits bond purchases against a backdrop of fresh political risk inEurope, funds betting on divergent macroeconomic themes couldalso benefit.
"More limited central bank appetite for QE [quantitativeeasing] could take away a significant element of marketsupport," said Anthony Lawler, head of portfolio management athedge fund investor GAM.
"An increasing range of economic outcomes and higher yieldsprovide more fertile trading conditions for active managers,which we believe should prove beneficial across asset classes." (Reporting by Simon Jessop; Editing by Keith Weir)
