Hedge Fund Predictions

Hedge Fund Predictions

Hedge Fund Managers Offer Predictions for the Next Year

Finalternatives has put together a great collection of forecasts from three hedge fund managers. Rory Hills, Michael DeJarnette and Basil Williams contribute their thoughts on the coming year and how the hedge fund industry will fare.
Rory Hills, Founding Partner, Hilltop Fund Management

“Part of our approach and philosophy is to generally avoid making macro calls and especially of the ‘what will do well next year?’ variety. That said, one issue we will watch for is to see if the level of inter-stock correlation in equity markets continues to be as high in 2011 as it has been for long periods of 2010.

“This has been driven by a binary 'risk on/risk off' approach by many investors which has often resulted in equities moving likes shoals of fish. This, combined with generally poor liquidity has created a difficult environment for many shorter-term equity trades, whether fundamental or systematic.

“In respect of fund of hedge funds, I would say this: We believe too many FoHFs continue to provide returns which are too correlated to equity markets (is it any surprise that in 2010, the worst month in terms of performance was May and the best September?) and this is not what investors want. We have no idea what 2011 holds but we do believe our portfolio will deliver solid positive returns regardless.” Source

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