The Regal Atlantic Absolute Return Fund has won this year's Australian Hedge Fund of the Year.

The fund, which has $80 million invested, was established by brothers Andrew and Philip King in January 2004.

It is one of four funds run by the Kings and returned 59.3 per cent to investors for the last 12 months, net of fees, and 125.6 per cent in the last two years.

It has been a difficult year for hedge funds across the world.

Last year's Australian Hedge Fund of the Year, Basis Capital, was wiped out by the United States' sub-prime fiasco and fellow Australian fund Absolute Capital was forced to halt redemptions from two funds to avoid a sale of assets at distressed prices.

K2 Asset management, whose Absolute Return Fund scooped this year's best long-short award, was forced to pull its proposed initial public offering in August after the turbulent equity markets threatened to kill off secondary demand for the stock.

Other winners at last night's awards ceremony in Paddington Town Hall included the Warakirri Alternative Strategies fund, which picked up the award for the best fund of fund, and Cadence Capital, which won Best Emerging Manager.

The Best Market Neutral Fund Award went to Barclays Global Investors' Total Return Australian Equity fund, while GMO's Global Tactical Trust was named the best Global Macro/Futures Fund.

Man Investments chief executive John Morrison won the Contribution to the Australian Hedge Fund Industry Award. 

Colonial First State was deemed the best investor supporting Australian managers.

The Hedge Fund Awards has in the past raised over $1.5 million for the Sydney based Cure Our Kids charity.