Category: Hedge Funds
A hedge fund is an investment fund that pools capital from institutional investors or accredited investors and invests in a variety of assets, often with risk-management techniques and complex portfolio construction.
They are administered by a professional investment management firm, and usually structured as a limited liability company, limited partnership, or other similar vehicle.
Hedge funds are different from mutual funds, as their use of leverage is not capped by requlators. They are also distinct from private equity funds, as most hedge funds invest in relatively liquid assets.
| |The Greek poet Archilochus wrote, “The fox knows many things, but the hedgehog knows one big thing.” … Read more The “Hedgehog and the Fox” Revisited – Have Managers with Big Ideas, But Diversify
| |The four biggest hedge fund launches of 2018 have attracted more than $17bn, according to figures compiled by the FT. That compares with the $13.7bn investors have put in existing funds, according to data from eVestment. from FT Hedge fund stars rake in billions for new funds … Read more The Power Law and Hedge Funds – Power Law in Size May Not Equal Power Law in Returns
| |Most hedge fund strategies were positive for April, but the average return was less than 50 bps. There were two negative outlier strategies with fundamental growth and merger arbitrage. Generally, the higher monthly volatility and dispersion created a mixed environment for return generation. Year to date returns suggest that it has been a difficult four months for most managers with average loses much larger than the average for the winners and only 7/19 strategies producing positive returns. … Read more Hedge Fund Performance Positive, but Weak for April – Most YTD Returns Underwater
| |The recently released Preqin Investor Outlook, Alternative Assets, H1 2018 describes the demanding environment for hedge funds. Investors do not believe hedge fund are meeting their expectations, allocations may be smaller, flows may be reduced, and there is a desire for better alignment of interests. Of course, there is also the desire for more performance. To address these issues hedge funds will have to change … Read more Preqin Investor Survey – What Are The Demands For Hedge Funds?
| |Hedge funds as measured by the HFR indices suffered with the overall market decline with only RV strategies being able to take advantage of the higher volatility environment. In general, the equity hedge fund declines were consistent with their longer-term betas (approximately .3 to .6). The outliers for the month were the event driven, special situations, macro and systematic CTAs indices. The year-to-date returns show significant dispersion with equity hedge fund indices generally positive while special situations, systematic CTAs, and event driven indices falling between -2.50 and -3.75 percent … Read more Hedge Fund Performance Sank With Equity Beta Decline