Hedge Fund Strategies During the Recession
Just came across an article which on top of the normal industry regulation and redemption talk discussed what strategies might actually do well over the next year or two. In addition to the ideas quoted below I believe that more simple, easy to understand strategies which survived both the 2001-2002 and current periods will go far with new investors.
Here is a few quotes from the article:
"Macro funds will be a big winner," predicts Sassan Ghahramani, former chief executive Medley Global Advisers, a research firm for hedge funds and other money managers. "There is so much policy involvement that is affecting the movements of markets. And in the next two to five years, central banks will unwind their interest rate cuts, but at different speeds in different countries." That will create trading opportunities for the macro managers.
The environment also is ripe for hedge funds that invest in distressed assets, such as real estate and securities backed by credit card and auto loans. "There is a lot of interest out there for this," Ghahramani says. "People are trying to put together war chests."
"Probably the best hedge-fund trade in the next year is to partner with the government in buying the securities it wants to get sold from banks," says David Gilmore, a partner at Foreign Exchange Analytics, which advises hedge funds and others about market trends. "You get the most leverage at the lowest rates and insurance on your downside risk." source