All strategies work – until they don’t. While the hottest ticket in town is still private credit, is it everything it’s cracked up to be?
In Cliff Asness’ latest missive, a fictional asset allocator from the future looks back on the decade to 2035 to figure out which assets helped their performance and which hurt it.
Hedge fund growth to favour multi-strategy products
Hedge funds should see good fund flows in 2015, although macro and managed-futures strategies are likely to lag behind multi-strategy funds as preferred options for institutional investors, according to a report by eVestment.
The report, (view here) says that, barring an unexpected global or financial event, global flows into hedge funds will be between US$90-110 billion, which will keep the industry above the US$3 trillion milestone of assets under management that it passed last year.
eVestment predicts further flows into equity strategies, although they are likely to be lower than last year’s 8.6 per cent growth rate. Favoured strategies are event and activist funds.
In the fixed income space, there will also be a further move out the risk curve, with investors favouring distressed debt and special situations.
With multi-strategy funds, the report says that their diversity makes them “a natural preference for traditional dollars rotating into the hedge fund industry and allocations at the rate seen in 2014 will likely continue”.
The drivers of the growth for hedge funds are concerns about equity market valuations, especially as the US market has risen about 50 per cent in two years, and continued low interest rates.
