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 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
| |Wall Street is filled with characters and “personality”. I have met my share, but a key question is whether some of these personality extremes actually lead to better returns. I have written about this in my posting The Wisdom of Psychopaths and Trading. Some have suggested that the characteristics of psychopaths if directed toward good goals may lead to successful outcomes. The core idea is that a lack of empathy or emotion found in psychopaths is actually good for some jobs. Certainly, there is a strong strain of thinking that trading should be without emotion. Hence, personality characteristics such as less emotion or empathy may be good for return generation. You just may not want to have them as your boss … Read more Psychopaths Are Not Good Hedge Fund Managers, Neither Are Narcissists – Who Would Have Thought?
| |Hedge fund performance, as measured by the HFR indices, showed strong performance in January especially for global macro and systematic CTAs. Systematic CTAs also generated returns that were in the top three categories for the last twelve months … Read more Hedge Fund Performance Strong in January, Especially for CTAs and Global Macro
| |Hedge funds returns were mixed for November, but the fundamental growth and systematic macro strategies generated strong returns of over 1 percent. The fundamental growth strategy is the HFR leader for the year with a return profile at over 17%. The macro systematic strategy again generated a strong positive return. The HFR macro systematic index return was significantly higher than other systematic indices for November which suggest a high dispersion across managers in this category. The macro/ CTA which includes discretionary managers was actually down for the month. The absolute return, special situations, and emerging markets strategies were the biggest down strategies for the month, but all showed declines of less than one percent … Read more Hedge Fund Performance Mixed, but some Bright Spots with Fundamental Growth and Systematic Macro