Hedge Funds
Hedge Funds
Diverse Offerings Across the Strategy Spectrum
Hedge fund managers employ a broad range of tactics across asset classes with a goal of delivering favorable risk-return outcomes. Including hedge funds in a diversified portfolio may increase returns and/or reduce portfolio volatility. iCapital offers access to a variety of single and multi-strategy hedge funds investing in multiple asset classes globally.
Multi-Strategy Hedge Funds
01
Equity Hedge
Equity hedge funds invest long and short in equity and equity derivative securities. Different approaches utilize fundamental or quantitative analysis, and vary in terms of market exposure, region, sector, and market capitalization. Advisors may consider equity hedge as a way to access returns from global equity markets, potentially with less downside risk given the hedged nature of most funds.
02
Event-Driven/Credit
Event-driven funds focus on companies involved in corporate transactions like balance sheet restructurings, recapitalizations, shareholder buybacks, and other capital structure adjustments. Event-driven funds often combine exposure to equity and credit markets with catalyst-driven, company-specific events, with performance driven by a particular transaction, providing idiosyncratic return potential for advisors and clients.
03
Macro (Discretionary/Systematic)
Macro funds trade a broad range of securities including equities, credits, rates, currencies, commodities, and derivatives across global markets. Discretionary macro focuses on broad market activity, monetary policy, geopolitical, or macroeconomic changes. Systematic macro utilizes computer-generated trading signals to identify pricing inefficiencies, from intraday to multiple months. Macro investing can offer non-correlated returns when compared to long-only equity and fixed income.
04
Relative Value Arbitrage
Relative value arbitrage focuses on discrepancies between securities across global equity, credit, and fixed income markets. Typically, equity and credit-based strategies, such as relative value equity, convertible bond, and capital structure arbitrage utilize fundamental analysis. Fixed income relative value often utilizes quantitative analysis to develop a broader investment thesis. Relative value funds can benefit when markets exhibit higher volatility, leading to the spread (or relative value) of different securities widening and narrowing, which creates non-directional, return-generating opportunities.
05
Multi-Strategy
Multi-strategy funds invest opportunistically across equity hedge, event driven, macro, and relative value. These funds often have a centralized risk management discipline across their entire investment team – many employ multiple teams, investing in numerous sub-strategies – and can benefit from tactical and strategic asset allocation shifts as market opportunities change over time. Multi-strategy funds may offer advisors multi-layered diversification, performance consistency, moderate volatility, and comparatively low beta, or sensitivity to traditional asset classes.
