Key Takeaways
- • Evanston Capital Management, which manages more than $4.3 billion in assets under management, released its annual 2026 Hedge Fund Outlook on January 7, 2026, arguing that the market environment favors active managers who can extract value from dispersion and dislocation.
- • The firm expects the source of long/short equity alpha to become more balanced in 2026, after long positions dominated 2025 alpha generation, with liquidity and trading flexibility as key advantages.
- • Event-driven strategies are expected to benefit from corporate activity carrying momentum into 2026, with conditions conducive to corporate events at least through the first half of 2026.
- • Global macro managers should benefit from deglobalization, which Evanston expects to produce more varied economic conditions and a richer set of trades, while correlations become less stable.
- • Relative value managers with specialized, capacity-constrained strategies, modest asset bases, and disciplined leverage use are identified as having opportunities.
Summary
Evanston Capital Management, LLC, an alternative investment firm with more than $4.3 billion in assets under management, released its annual Hedge Fund Outlook on January 7, 2026. The report, based on the firm's research on the hedge fund universe, covers the four major hedge fund strategies: long/short equity, event driven, global macro and relative value.
Co-chief investment officer Adam Blitz said the environment "strongly favors active management over passive," emphasizing extracting value from dispersion and identifying specific pockets of dislocation rather than riding broad market beta. Kristen VanGelder, co-chief investment officer and primary author of the Outlook, said there is less competition today for differentiated, specialist managers with deep knowledge of their universe to add alpha.
In long/short equity, Evanston expects the source of value-add to become more balanced in 2026, compared with 2025, when long positions were the dominant source of alpha. The firm highlights liquidity and trading flexibility as key advantages in market conditions that can create an illusion of liquidity. For event-driven strategies, the firm acknowledges that tariff uncertainty stalled some corporate activity but expects recent event momentum to carry into 2026, with conditions conducive to corporate events at least through the first half of the year.
For global macro, Evanston expects continued benefit from deglobalization, which should produce more varied economic conditions across countries and a richer set of prospective trades for skilled managers who can optimize across directional, relative value and volatility dimensions. The firm also expects less stable correlations to create both challenges and opportunities. In relative value, the outlook sees opportunities for managers with specialized, capacity-constrained strategies, modest asset bases and disciplined use of financial leverage.
The report is positioned for institutional investors and financial advisors seeking to diversify beyond increasingly concentrated public markets. The content is a firm-issued press release, and its forecasts are forward-looking views subject to change.
Co-chief investment officer Adam Blitz said the environment "strongly favors active management over passive," emphasizing extracting value from dispersion and identifying specific pockets of dislocation rather than riding broad market beta. Kristen VanGelder, co-chief investment officer and primary author of the Outlook, said there is less competition today for differentiated, specialist managers with deep knowledge of their universe to add alpha.
In long/short equity, Evanston expects the source of value-add to become more balanced in 2026, compared with 2025, when long positions were the dominant source of alpha. The firm highlights liquidity and trading flexibility as key advantages in market conditions that can create an illusion of liquidity. For event-driven strategies, the firm acknowledges that tariff uncertainty stalled some corporate activity but expects recent event momentum to carry into 2026, with conditions conducive to corporate events at least through the first half of the year.
For global macro, Evanston expects continued benefit from deglobalization, which should produce more varied economic conditions across countries and a richer set of prospective trades for skilled managers who can optimize across directional, relative value and volatility dimensions. The firm also expects less stable correlations to create both challenges and opportunities. In relative value, the outlook sees opportunities for managers with specialized, capacity-constrained strategies, modest asset bases and disciplined use of financial leverage.
The report is positioned for institutional investors and financial advisors seeking to diversify beyond increasingly concentrated public markets. The content is a firm-issued press release, and its forecasts are forward-looking views subject to change.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.