Emerging Managers: Good Buy or Good Bye? (Barclays Capital’s Capital Solutions Group)

Prime Services • April 2011

KEYWORDS: emerging managers, Volatility, operational risk, alpha

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  • Produced by Barclays Capital’s Capital Solutions Group

Summary:

In investors’ continuing search for alpha, the following question almost always arises: Does size matter when selecting hedge funds? In other words, is there more alpha generated by small funds than large funds? If so, what are the potential trade- offs in terms of volatility or operational risks? In recent years, the question has been expanded to include fund age, as investors wonder if younger funds generate more alpha than older funds.

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