Unless hedge fund managers produce alpha, diversify institutional portfolios and protect their downside at a fair price, they risk more of the crippling outflows many experienced in 2016.
In a sharp reversal of fortune, the majority of hedge fund and hedge funds of funds experienced asset declines in the year ended June 30.
The majority of hedge fund and hedge funds-of-funds managers saw an increase in their assets in the year ended June 30, but there was wide dispersion between the best and worst firms and between hedge fund and hedge funds-of-funds managers.
For hedge fund and funds-of-funds managers, 2013 was a better year than the last as asset growth for both types of firms was positive.
The gap between the growing assets managed by large hedge fund managers and the dire declines of many hedge funds-of-funds firms widened into a chasm over the past year.
Hedge funds boom with help from institutions while funds of funds display deeper wounds.