The Universa approach to hedging tail risk

Elevated concern about extreme events has boosted interest in hedging tail risk, but this means turning conventional fund management on its head. Mark Pengelly talks to Mark Spitznagel, founder of hedge fund Universa Investments

Oscar Wilde once said expecting the unexpected shows a thoroughly modern intellect. After the biggest financial meltdown since the Great Depression, this is perhaps more true than ever. Having been caught out by the ferocity of the crisis, investors are now much more aware of the risks of extreme events – and the fact they seem to occur a little more frequently than many had thought.

This change in perception has led to a growing interest in a new generation of funds designed to perform well in