By Diane Harrison, principal of Panegyric Marketing
Charles Dickens’ Bleak House spins a tale of mystery, intrigue, family dynamics, and irony in the Victorian age that had readers gripped by its indictment of the English court system. While the novel is packed with intricate plot twists and turns, the main story line centers on the contested will case of Jarndyce and Jarndyce, which when it finally ends, finds that the costs of litigation have entirely consumed the estate. The erosion comparison is unfortunately apt when compared to the current state of the hedge fund industry.
Market choppiness, layered fees, allocation realignments, and burgeoning regulations worked to chip away at the historical performance trends of hedge funds in 2016. Investors expressed their dissatisfaction with hedge fund performance to industry bellwether survey group Preqin in their September Investor Outlook: Alternative Assets H2 2016. Some of the findings reveal that:
- Four out of every five of the investors interviewed in June 2016 expressed disappointmentwith hedge funds for failing to meet their return expectations over the past 12 months.
- Significant numbers of investors, approximately 39% of those Preqin surveyed, plan to reducethe amount of capital they have invested in hedge funds over the next 12 months.
- Less than half this figure (18%) plan to increase their exposure.