Investing in alternatives: A closer look at the hedge funds industry

Hedge fund closures have outpaced launches over three years

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David Doberman of Barclays
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David Doberman of Barclays

The rise of passive investing and an extended investment cycle have served as a wake-up call to the hedge fund community.

Over the past three years, hedge fund closures have outpaced launches. Many high-profile funds, such as Perry Capital, Eaton Park and Hugh Hendry's Eclectica, have been wound up. Nonetheless, investor interest towards the sector remains strong.  Industry assets swelled to a record $3.2trn at the end of 2017. Yet, the industry is adapting to trends such as fee reductions, improving transparency and greater discipline around capacity. An allocation to hedge fund strategies can improve the risk-return characteristics of a diversified investment portfolio by providing an alternative to pu...

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