Description
In the past several years, multi-strategy funds’ growth and performance has dominated the hedge fund community. A divide is occurring between top firms that are the most established and largest compared with the newer, less established have Problems have started to appear for the less established multi-strats due to mediocre performance, the ongoing war for talent and increased regulation. The white paper looks at their evolution as well as what the outlook may hold. Issues addressed include whether single-manager focused funds will make a comeback, will smaller multi-strats face a pushback on pass-through expenses, the likelihood of the talent war leading to consolidation, and the increasing use of internal teams and outside managers.
Table of Contents
The Landscape
Ebb and Flow of Funds
Cracks Occurring in the Multi-Strategy Arena
A Great Divide
Muted Performance in 2023
Weak Asset Raising
Costly Talent War Persists
Regulatory Scrutiny Tightens
Responding to Challenges
Stabilizing the Asset Base/Changing Liquidity Terms
Building Out Leadership Teams
Expanding Capacity Constraints
Investor Interest
Institutions
Insurance Companies
Family Offices
Outlook
Quant Multi-Strategy Funds
Resurgence of the Single Manager Specialized Fund?
Pushback on Pass-Through Expenses
Talent War Leading to Consolidation
Hybrid Approach
Appendices
A – Sample of Snapshots of Individual Multi-Strategy Firms
B – Sampling of Former Millennium and Citadel Employees
Footnotes
About Peltz International