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Equity long/short hedge funds battle to find alpha as correlation remains high
While correlation among hedged equity managers remains stubbornly high post-crisis, carefully selected long/short funds should continue to add alpha to hedge fund portfolios over the long term.
![viewpoint-crowd viewpoint-crowd](/sites/default/files/styles/landscape_750_463/public/import/IMG/385/250385/viewpoint-crowd-580x358.jpg.webp?itok=W66yK4Dq)
David Shukis, Cambridge Associates
After a long record of producing some of the highest returns among hedge fund strategies, long/short managers as a group have lagged other strategies over the past three years. Some have attributed this disappointing performance to crowding in the long/short area, observing that a handful of names appear in a large number of long/short funds which limits the potential alpha of long/short managers.
It is true that there has been an increased concentration of
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