Exploiting neutrality

Giovanni Beliossi is setting up his own equity market-neutral hedge fund, FGS Capital. He has some new ideas about how to make such a fund work.

Despite their name, many equity market-neutral hedge funds have seen their performance closely tail the dismal returns of the markets in recent months. But Giovanni Beliossi, who is setting up his own equity market-neutral hedge fund, London-based FGS Capital, says the perception of a high correlation between this style of fund and the market is due to misapplication of the market-neutral strategy concept – that the investment style has received, in short, a bad rap.

Equity market-neutral