LONDON, June 17 (Reuters) - Hedge fund managers making

bets on mergers and acquisitions outperformed those deploying

other strategies with a return of 7.7% in the first five months

of 2024, Goldman Sachs ( GS ) said in a note to clients, as deal-making

rebounded.

Although Goldman did not offer a year-earlier figure for

comparison, Barclays prime brokerage noted at the time that such

fund mangers had returned a negative 0.8% on investment from

January to May 2023, as high interest rates curtailed deal

making.

While seeing a resurgence this year as companies gain

confidence from declining interest rates and a stabilising

economic backdrop, global deal-making has yet to return to

2021's record levels.

Worldwide M&A was worth $1.3 trillion during the first five

months of 2024, a 23% increase versus the same period of 2023,

but below the $1.8 trillion recorded in January-May 2022,

according to LSEG data.

According to LSEG, U.S.-targeted M&A has accounted for 56%

of overall global M&A this year, the highest year-to-date share

since 1998.

Deals have included consumer bank Capital One's

$35.3 billion bid for credit card issuer Discover Financial

Services ( DFS ) in February and ConocoPhillips' ( COP ) $22.5

billion offer for Marathon Oil ( MRO ) in May.

Hedge funds generally averaged around a 7% return on

investment through end-May, Goldman Sachs ( GS ) said. Stock trading

hedge funds returned 7.4%, helping to lift the average of the

group.

Hedge funds that bet on the relative price of two assets

performed the least strongly, returning about 5% for the year,

said the bank.