Why are hedge fund allocations still lagging, even as performance continues to impress?
In a recent article for Pensions & Investments, Jon Caplis, CEO of PivotalPath explored this hedge fund paradox, making it clear that the problem isn’t industry performance, but measurement.
Too many allocators and managers are working with flawed and opaque benchmarks that misrepresent the hedge fund sector’s true performance levels. Allocators tell PivotalPath that the funds found in commercial hedge fund databases ‘just aren’t investable’. Managers know that reporting to a database means their private data is directly sold to other funds, exposed in a headline and rarely seen by an allocator.
The result? Benchmarks built on flimsy data that are not only wrong but inhibit allocation decisions and mislead managers about true peer group dynamics. In 2024 one well-known hedge fund data provider underestimated the performance of the hedge fund multi-strategy space by 4.5% – mistakes like this need to be taken seriously,
The good news is, it’s fixable.
In the piece, Jon explains why accurate benchmarking matters, and how PivotalPath’s institutional-quality and integrity-led hedge fund data and analytics are helping allocators and managers see the space more clearly via:
✅ A complete universe of institutional-quality funds
✅ Transparent and data-driven methodology
✅ Reliable, bias-free benchmarking designed for better decision-making
✅ Data that is always secure, protected and verified. Investors and Mangers badly need an accurate view of hedge performance, providing a foundation to communicate clearly with each other across a level playing field. A set of precise benchmarks along with trusted metrics can turn impressive sector-wide performance into the flows the hedge fund space deserves
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