Are UK equity hedge funds simply tracking the index?

Resolution's Kelly accuses hedge funds of focusing on their long book and believes they will struggle to generate alpha in falling markets

Cartesian manager Andrew Kelly has accused hedge fund managers of focusing almost exclusively on their long book and struggling to generate alpha in flat or falling markets. Kelly, co-manager of the Cartesian UK equity long/short fund, believes investors should challenge hedge fund managers to prove they are not running closet long-only products. "Some managers simply short their benchmark index as a short cut hedge against their long book," he added. "This removes the opportunity for short alpha and is potentially dangerous when markets are rocky, which they are widely predicted to be i...