2016 Hedge Fund Symposium


2016 Hedge Fund Symposium

Opportunities amidst uncertainty

Ensnared in a war on active management, the hedge fund industry is faced with pressures that can slow or stop its growth trajectory. Hedge funds that want to succeed should implement new strategies and break from the status quo. Our report on Deloitte’s 2016 Hedge Fund Symposium highlights the solutions that can help hedge funds stand out. From talent to impact investing, there are opportunities amidst uncertainty.

Where does the hedge fund industry go from here?

The event brought together hedge fund leaders to discuss industry challenges while exploring the theme, “opportunity amidst uncertainty.” While there is growing pressure with the hedge fund industry going through disruption, there are also possibilities to innovate and drive growth.

The formula for success today is the same it’s always been—exercise good judgment and make timely and informed decisions to attract capital. But it’s going to take more for hedge funds to differentiate themselves in an increasingly crowded market. The group of leaders we assembled for this year’s symposium shared some of the solutions they’re exploring to help their firms stand out across a number of dimensions, from performance and talent development to compliance and fee structures. We hope this summary inspires your business to build on these innovations and sets the stage for the next phase of the industry’s growth.

Download the report to learn more about the opportunities discussed at the eighth annual Hedge Fund Symposium.

Hedge fund industry challenges

The backdrop for this symposium was decidedly more downbeat than when it was held a year ago. In addition to continued underperformance, the industry is facing a range of related ripple effects that are threatening to slow or arrest the rising growth trajectory in assets under management:

  • Rise in redemptions: In 2016, hedge funds were hit by the biggest tide of redemption requests since the global financial crisis in 2009.
  • Shift in allocations: Driven by unrelenting media coverage of industry underperformance and expense ratios, the number of public pension funds exiting or reducing their hedge fund exposure has climbed.
  • Talent woes: In this challenging environment, many long-time hedge fund managers have called it quits, and hiring the next generation of talent has become more challenging.

Many symposium attendees were quick to point out that the industry is ensnared in a larger war on active management. To dig deeper into the industry’s challenges, download the report.

Talent as a differentiator

Skilled talent has been the driving force behind the hedge fund industry’s ability to deliver superior returns. For more than 30 years, hedge funds have found it easy to attract the best and the brightest to their firms. But now, in an environment where hedge funds are facing heightened pressure to prove their value to investors, the search for the next generation of industry leaders has taken on new meaning.

In addition to good judgement and self-awareness, the industry is increasingly on the hunt for those with the technology skills. Data scientists are in hot demand among asset managers, which may have lagged behind other industries in recruiting such skills. A representative from one energy-focused hedge fund said a dearth of industry specialists has led him to leverage outside firms to analyze topographical data and identify areas where carbon resources may be more abundant.

To learn more about how talent can differentiate hedge funds, download the report.

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