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January 31, 2019

Hedge funds have witnessed a growing tide of negative sentiment directed at them, driven by a lengthy period of lackluster returns coupled with hefty fees. We take a look at the hedge fund industry and share how we have disrupted the status quo to design a better hedge fund solution for our clients
Investments
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We believe hedge funds continue to have competitive advantages relative to larger institutional asset managers, which result from their largely unconstrained investment mandate. They can be more dynamic, hire the brightest investment talent and should be less influenced by underlying market returns. Consequently, a hedge fund portfolio can generate strong performance and complement a total portfolio.

In this paper, we take a look at the hedge fund industry and share how we have designed a new way; a way that combats the structural headwinds facing the industry by isolating specialist skill, designing appropriate solutions to fit in with the wider portfolio and negotiating value for money. We believe that this new way allows hedge fund portfolios to deliver attractive returns, improve portfolio balance and ultimately justify their inclusion in our clients’ portfolios.

Willis Towers Watson has worked with its clients to implement hedge funds in portfolios for many years, leveraging a large team of manager research professionals to deliver differentiated outcomes. We have always avoided viewing hedge funds in isolation, but rather as part of a portfolio, designed to complement and to augment. This philosophy has driven the superior downside protection we believe is so important. Evolving to the new way, to thrive going forward, has been far from a trivial exercise. It has required us to draw on our wider resources. We have leveraged our clients’ collective scale, new infrastructure and our culture of innovation to help identify, design and launch specialist hedge fund solutions underpinned by a desire to change the investment industry for the benefit of the end saver. We believe we have created a new and different way and hope disillusioned asset owners will evaluate hedge funds through this alternative lens.

Footnotes

1. Track record quoted from inception of original multi-strategy credit hedge fund, August 2007.
2. Track record quoted from inception of strategy, August 2014.
Past performance is not a guide to future investment performance.

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Title File Type File Size
Hedge funds: A new way PDF .9 MB
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