Every sector that I look at, I have “Well, maybe good” or “Well, maybe not so good” views. One thing I do know, hedge fund assets will grow strongly. There are significant mandates being planned in Australia, and they are coming from some non-traditional sources. Hedge fund managers are hard- and soft-closing. We are now in a new world of transparency and risk, where liquidity risk within a hedge fund manager’s portfolio is a primary issue. Managers do not want to get caught in a liquidity downdraft again similar to 2008-09. Managers are matching their liquidity terms with underlying asset exposures, which is a far cry from their pre-2008 position. This strongly appeals to investors as they look to hedge their actively managed exposures to dampen volatility.
Alternatives
The chief investment officer of the $150 billion industry super fund says that Hostplus’ portfolio will weather the ongoing downturn in software companies and that moves by a number of large private credit managers to gate their funds are a result of the asset class being offered to retail investors who should not have assumed the funds would be liquid enough to get money out when everybody else is trying to do the same.
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