How hedge funds are preparing for the turbulence resulting from the Covid crisis

Posted on 23 Dec. 2021 at 12:56Updated 23 Dec. 2021 at 13:02

The rise in rates and the monetary tightening long awaited by hedge funds should become widespread in 2022. Consequence of this change of environment: the markets are likely to be more heckled and the risks will be better remunerated or sanctioned in the different classes of ‘assets. It is up to alternative funds to navigate between them as well as possible. They are very dearly paid (20% of the profits generated for their customers go to them) for this expertise in navigation in troubled waters.

Unlike some central bankers, hedge funds had bet from the start of the year on persistently high inflation, particularly in the United States. Some had diversified their investments accordingly by betting on assets supposed to offer protection against rising prices, such as commodities on which they recorded one of their strongest performance, 21.5% over the first 11 months of 2021 according to the Hedge Fund Research (HFR) indices.

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