Today’s multi-asset class investors are taking a fresh approach to hedge funds in order to achieve their portfolio goals. Prime Services’ David Shalom explores allocators’ top three areas of focus when rethinking how to use hedge funds.
At BNY Mellon’s Pershing, our capital introductions group works with institutions and private wealth investors to understand which hedge fund strategies they’re looking for and their thought process behind manager selection. As a result, we’re able to share the latest trends on changing investor demand and the factors driving those changes with our hedge fund clients via our periodic newsletter called “What’s Trending With Allocators.”
Currently, a trending topic of discussion is how hedge funds are used. Historically, multi-asset class investors have used standalone hedge fund allocations, also referred to as “trading alpha strategies,” as diversifiers against their equity and credit beta exposures. However, the returns generated from a standalone basket of hedge funds have caused investors to think about how hedge funds can be more effectively used in their portfolios.
In rethinking how to use hedge funds, there are three areas of focus for allocators:
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David Shalom is a Vice President for the Prime Services division of BNY Mellon | Pershing. David leads our capital introduction team in the northeast and midwest United States, assisting clients in their capital raising efforts through targeted introductions to institutional allocators and private wealth investors.