Summary of Hedge Funds

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Rating

8 Overall

7 Importance

8 Innovation

8 Style


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. 

In this summary, you will learn

  • How low investment returns, fee erosion, increasing competition and other issues challenge the hedge fund industry today;
  • Why some of these problems also present opportunities; and
  • What hedge funds must do to remain competitive. 
 

About the Authors

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

 

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.


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