The following article was co-written by Jon Caplis of PivotalPath and Mike Jacobellis of New Holland Capital. The article features data and analysis drawn from multiple PivotalPath indices and offers commentary on hedge fund performance highlighting several key strategies throughout 2021. Together, the authors challenge underlying narratives about performance during the year and offer a much deeper context for many key drivers of returns and opportunities going forward.
Overall hedge fund performance in 2021 was moderately better than its long-term average. While top-line performance in 2021 may not have turned heads, a deeper look under the surface reveals that there was significant dispersion in performance by strategy, providing an unusually attractive environment for allocators to outperform (or underperform) based on their positioning. 2021 also presented a vastly different set of challenges and risk factors from 2020, completely shuffling the leaderboard of hedge fund strategies.
As with most alternative investments, evaluating performance requires the right context.
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