Returns in several strategies could be ready to resurrect from the dead and it may not be just because of the expected end of the economic cycle, experts say.
Interestingly there is some agreement on which specific strategies can get the job done this year, and all agree that manager selection is of prime importance considering such wide return dispersion between managers active within the same strategies.
While many touted the potential of Asian strategies and cryptocurrency in our 2018 investor outlook survey, much of that hope didn’t pan out in the end. The doom and gloom that was palpable in the markets at the end of 2018 though has been replaced with a more sanguine tone expectant of potential opportunities outside of direct lending and other more niche illiquid investments.
At the beginning of 2019, we spoke to nine investors representing a combined hedge fund portfolio of approximately $165 billion. We also spoke with three prominent consulting firms – Wilshire, Mercer and AonHewitt – about what they see on the horizon.
Survey Participants:
Andrew Walling and Jonathan Bishop, Aetos Alternatives Management
Andrew Walling and Jonathan Bishop are managing directors and co-deputy chief investment officers of Aetos.
Chris Walvoord, Aon Hewitt
Chris Walvoord leads Aon Hewitt’s global liquid alternatives team within the global investment center. He oversees research and investment activities across a variety of liquid alternative strategies with research teams located in Chicago, New York and London.
Timothy Ng, Clearbrook
Timothy Ng joined Clearbrook in 2010 and is chief investment officer and head of the Clearbrook investment committee. In this role, he is involved in global macro and manager research, portfolio analysis and risk management. Clearbrook oversees its hedge fund assets as a non-discretionary consultant as well as an outsourced chief investment officer.
Kunjal Shah, Lyxor Americas
Kunjal Shah joined Lyxor Americas in 2014 as the global head of hedge fund research. He is responsible for supervising the portfolio management and hedge fund research teams.
John Jackson, Mercer
John Jackson is global leader of Mercer’s hedge fund boutique, which focuses on researching hedge funds and multi-asset strategies, developing intellectual capital and working with clients on portfolio construction.
Jarrod Quigley, Morgan Stanley Investment Management
Jarrod Quigley is a portfolio manager on the AIP hedge fund team with Morgan Stanley Investment Management, focusing on relative value, mortgage and secondaries strategies. He is also a member of the investment committee.
Raymond Nolte, Skybridge Capital
Raymond Nolte is co-managing partner and chief investment officer of SkyBridge Capital and serves as chairman of the investment, manager selection and portfolio allocation committees.
Andrew Angelico, Wilshire Associates
Andrew Angelico is a vice president of Wilshire Associates and a member of Wilshire Funds Managements Manager Research Group. While managing multi-manager portfolios, Angelico is primarily responsible for the coverage of hedge funds and liquid alternative mutual funds.
Investor Outlook 2019: Preparing for the return of alpha on Absolute Return.