Traditional investment approaches have long relied on bond allocations to preserve capital and generate income, and on equity allocations for growth and capital appreciation. However, investors are now faced with a unique set of challenges as markets grapple with regime change, central bank policy normalization and low interest rates.
As a result, sophisticated investors are seeking alternative sources to bolster returns. Hedge funds have the potential to provide an attractive solution and provide complementary exposure to traditional, long-only investments. By allocating across hedge fund strategies, investors can access diversified approaches that seek to provide consistent, risk-adjusted returns with historically reduced volatility.