Hedge Funds

Why hedge funds?

Hedge funds may play several roles in client portfolios including enhancing diversification, generating alpha and mitigating downside risk, especially when equites and bonds are down.

Trends shaping the macro landscape

Mega forces present evolving opportunities for hedge funds, positioning them to capitalize on shifting financial landscapes and maximize returns.

Market landscape

The next 5-10 years will be more challenging than the previous due to structurally lower growth and geopolitical risk. Material downgrade to return expectations over the next 10 years. Clients will need to shift their focus in order to meet clients return and outcome objectives.

Investors need to understand the drivers of portfolio returns and apply the right blend across index and alpha strategies to build resilient portfolios that prioritize cost, risk and time efficiency. Investors need to identify true sources of alpha (beyond factor & market exposures). As a core strategic building block, alternatives bring diversification and long-term risk adjusted returns to a well-balanced portfolio of the future.

Complimentary to traditional portfolios

Optimal hedge fund portfolios seek to emphasize idiosyncratic (e.g., security-specific) sources of return while minimizing broad market risks

Strategies for diversification and downside protection across market cycles

While hedge funds strategies can be effective diversifiers and potential return enhancers, strategies can differ vastly from one another. Holding diversified exposures to multiple hedge funds strategies in the long term, whilst dynamically allocating to short-term opportunities that may present themselves in certain hedge fund strategies as we move across market cycles and regimes.

Meet our team

BlackRock manages US$38bn across a broad range of hedge fund strategies. With over 20 years of proven experience, the depth and breadth of our platform has evolved into a comprehensive toolkit of 30+ strategies.

Leadership

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"We have seen strong interest in hedge funds given their ability to deliver uncorrelated sources of alpha irrespective of the environment. In the current market regime, clients are using these strategies in a variety of ways whether in a traditional hedge fund 'bucket,' as an alpha engine in a portable alpha structure, as a complement to traditional assets, and beyond."

Abigail Gold Geller
Managing Director, Alternatives Specialist Team, BlackRock's Institutional Business