Three distinct characteristics of O’Connor’s long/short strategies
- Focus on highest quality investment team
This is essential for a successful long/short strategy, especially as O’Connor is a fundamentally driven. O’Connor hires individuals who bring some specific skill set or experience to improve the investment process.
- Invest in strategies that are durable against quantitative and passive flows
This means that O’Connor target segments of the market which are less influenced by quant/passive flows, or leverage PMs who have a proven ability to manage and navigate quant/passive flows effectively.
- Invest in strategies with alpha tailwind
O’Connor looks for the presence of some characteristic of the strategy that makes it structurally attractive from a long/short perspective. This could be any number of things, such as supply/demand asymmetry, evolving regulatory landscape, changing market structure, or powerful thematic trends that are driving sustained performance and dispersion within financial markets.
Currently there are two strategies in particular with strong “alpha tailwind”: China markets and environmental-focus strategies.
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UBS O’Connor has embraced the ever-changing market environment over 20 years as a hedge fund manager, navigating market dislocations and opportunities.
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