The much-hyped constrained version of equity long/short investing called 130/30 has failed to meet investors’ expectations of returns thanks to the widespread adoption of the strategy by purely quantitative asset managers earlier this year; subsequently many of these managers performed poorly during the summer’s liquidity crisis.
A number of 130/30 funds have launched since the end of 2006, when there was a lot of speculation that institutional investors were ready to place vast amounts of money into the strategy.
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