In summary…
Manager selection is critical when it comes to investing in hedge funds or fund of hedge funds. In the latter part of 2021, we did a short note looking at how investors in hedge funds that have a higher exposure to beta-driven strategies had been impacted by the turbulence of September that year. Since then market conditions have deteriorated further with both bonds and equities moving against investors—significantly impacting those holding traditional 60/40 portfolios.
So how have hedge fund investors fared against the backdrop of market turbulence this year?
With the major hedge fund indices showing significant negative performance to June 2022, you could be forgiven for thinking that hedge funds have been tested and failed this year. However, as we have previously noted, the hedge fund industry is not homogeneous and there is significant dispersion at both the strategy and manager level.
