Post by AlternativeSoft

Hedge fund assets just hit an all-time high — approaching $6 trillion. The reason has less to do with hedge funds and everything to do with bonds. For 40 years, government bonds had one job in institutional portfolios: fall when equities fall. Since 2022, they've stopped doing it. AMP has cut government bonds across its funds. Australia's Future Fund says it will look to hedge funds rather than sovereign debt to offset equity risk. Norway's $2tn Norges is making its first hedge fund allocations ever. The diversifier mandate has moved. But there's a catch: bonds were a commodity — you could buy the index and dispersion between managers was measured in basis points. Hedge funds are the opposite. Top-to-bottom quartile dispersion runs to double digits per year, and a "market neutral" label is no guarantee of protection in a drawdown. If hedge funds are the new bonds, manager selection is the new duration risk. Our full analysis, including the three verification tests every allocation should pass: https://lnkd.in/e5FM_EFg Data via With Intelligence, HFR and Pensions & Investments. #HedgeFunds #InstitutionalInvesting #PortfolioConstruction #AssetAllocation #PensionFunds #FamilyOffices #AlternativeInvestments #ManagerSelection #AlternativeSoft