Fundamental equity long/short hedge fund strategies face a challenging environment. Three trends — more hedge funds running the strategy, lower aggregate alpha in the industry and fewer stocks — are causing the problems, according to a report by Novus.
Investors continue to have confidence in hedge fund strategies, starting the last quarter of this year with record inflows, according to Hedge Fund Research (HFR).
While most hedge funds experienced mixed performance in September, some strategies showed significant gains led by fixed income based relative value arbitrage.
Hedge fund performance fell in February, ending a streak of 15 consecutive monthly gains for the broad-based HFRI Fund Weighted Composite Index, according to the latest HFR data.