Mercer: Investing In Hedge Funds - Why Hedge Funds? May 2021
May 2021 - Hedge Funds
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Continuing our four-part series on hedge funds, this second installment expands on the strategic benefits of an allocation. In our view, the core benefits of a well-constructed allocation include diversification, asymmetry/convexity and a compelling return profile. These benefits can provide resiliency and ballast to a portfolio. As highlighted in our previous paper, despite the 2010s being a challenging performance environment, we believe that the benefits of an allocation remain true and that the environment may be improving as headwinds shift to tailwinds — or at the very least, decline to a soft breeze.
The third article in this series will focus on considerations for building and managing a hedge fund allocation. The final installment will focus on how to implement diversifying alternatives as a constrained investor.