Why Hedge Funds Will Not Fail (Gravitas)

KEYWORDS:

Authors:

Jayesh Punater, founder and CEO, Gravitas

Organizations:
  • Gravitas

Summary:

Despite fee pressures, inability to consistently produce high alpha, and a lack of long term capital well-aligned with investment strategies, I believe hedge funds will overcome these challenges and succeed.

Why am I optimistic when other experts say otherwise? There are three primary reasons:

  1. A macro view of the asset management industry reveals that there are few other investments providing investors with long-term, above-market returns;
  2. The talent running hedge funds comprises the most agile, innovative, and sophisticated risk-takers, capable of navigating changing market conditions successfully over a longer timeframe;
  3. There is better financial alignment than other investment models; the managers typically have significant skin in the game so they are “eating their own dog food”.