In this quarter’s update, we look at the market pressure long/short equity managers experienced in October as technical selling by some tightly risk-controlled multi- manager platforms and other volatility-targeting strategies, combined with a deleveraging effect stemming from ongoing redemption activity (including announcements of several high-profile fund closures) created major headwinds for the strategy.
Developed markets equities rose steadily in second quarter despite negative geopolitical developments and increased tensions on the trade front. In this quarter’s update, we look at the environment and opportunity set for event-driven strategies, highlighting conditions that have fostered a constructive outlook for merger arbitrage in particular. We also explore hedge fund managers’ increasing use of activist campaigns as a tool to effect corporate change and improve shareholder returns, both in the United States and abroad.
Global equity markets marched upward to start the year, and many indexes reached new all-time highs in late January, only to drop sharply when volatility returned with a vengeance beginning the last week of that month. In this quarter’s update, we look at the volatility and dispersion that broadly characterized the period for fundamental hedge fund strategies, while highlighting the churn that affected managed futures and particularly trend following systems.
The third quarter update examines the subject of position crowding and its effects on performance, particularly in periods of market stress and heightened volatility.