After more than a decade marked by ultra-low interest rates, subdued volatility and high correlations across asset classes — a period referred to as the "Alpha Winter1", conditions for hedge fund strategies have fundamentally shifted for the positive.
Higher rates, greater dispersion among individual securities and normalised volatility have created attractive opportunities for strategies that generate returns independently of market direction.
At the same time, traditional diversification has come under pressure. Rising inflation and periods in which equities and bonds have sold off together have challenged the reliability of the classic 60/40 portfolio.
Drawing on our detailed research across the multi-strategy hedge fund universe, our latest white paper explores:
- What has changed in markets, and why these shifts have reopened the opportunity set for hedge funds
- How hedge funds may improve investor outcomes through strategies such as macro, relative value, event-driven and equity long/short
- How to think about implementing these allocations effectively in a broader portfolio, including the role of discretionary and quantitative multi-strategy funds, and the importance of operational structure and fee transparency
The full piece explains how institutional investors can build hedge fund allocations that are practical, scalable and aligned with governance needs while keeping portfolios resilient through different market cycles.
If you'd like to understand how these insights could apply to your own investment approach, we invite you to get in touch.