In October, the HFRI long/short index (equity hedge) was down almost 8%, taking the year-to-date loss to 22.5% compared with the weighted average of 15.5%. Almost $30 billion has left long/short equity strategies this year. HFR estimates that there is about $516 billion in long/short funds, down from $684 billion at the end of 2007, including asset loss through performance.
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“The myth that one could produce on the upside while fully protecting the downside has been busted” Harry Rady, Rady Asset Management |
But is it the end of the long/short strategy? Harry Rady, CEO of Rady Asset Management, says it is not but believes the investment approach used by long/short managers will have to change.
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