University of Minnesota - UMN Executive Leadership Insights
Hedge Funds
Report

Hedge Funds

Down But Not Out

Brent Beardsley, Renaud Fages, Tawfik Hammoud, Philippe Morel and Riya Sen
Boston Consulting Group, 2017
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Editorial Rating

8

Qualities

  • Analytical
  • Innovative
  • Applicable

Recommendation

Recent trends among hedge funds provide a stark study in contrasts, according to this informative report from professionals at the Boston Consulting Group. While assets under management mushroomed to $3 trillion in 2016, up from just $40 billion in 1990, hedge fund performance remains subdued at a time when the bull market in stocks keeps chugging along. But the reasons for hedge fund woes go well beyond performance. Today, the sector must transform its entire business model to become more client-centered and to attract top investment talent. getAbstract recommends this authoritative report to investors and financial services professionals. 

Summary

Hedge funds provided only a 3% return in 2016, marking the sixth consecutive year that they underperformed stocks and bonds. Some institutional investors are fleeing, while others are reconsidering their options. A number of factors, including low market volatility, slow economic growth in developing countries and stagnant commodity prices, may explain some of the underperformance. But these aren’t the only reasons hedge funds are struggling.

Several trends point to both challenges and opportunities for the industry. Distinctions between hedge funds and other investment options have lessened, as ...

About the Authors

Brent Beardsley et al. are professionals with the Boston Consulting Group.

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