As we end the year and look into 2020, risk assets are trading near all-time highs at a time when the global economy is facing a number of potential headwinds including slowing economic growth, trade tensions, uncertainty surrounding Fed policy and political turmoil in Europe. Although it is difficult to predict the timing and magnitude of market moves, we believe investors will be well served with investments in hedge fund strategies that can either potentially take advantage of market stress or generate returns independent of market direction. In this compendium, we identify strategies that we believe can be key elements of a portfolio in the current and coming market environment.
U.S. Distressed Credit: An Expanding Opportunity
Economic pressures, “fallen angels” and volatility could provide openings to alert managers in the distressed credit space.
Uncorrelated: Accessing a Potent Diversifier
The asset allocation benefits of uncorrelated strategies are well known, but overcoming obstacles to entry requires an informed approach.
Asset-Based Lending: Finding Pockets of Entry
In an increasingly competitive environment, we see potential in “off-the-run” areas that offer defensive characteristics and return potential.
Insurance-Linked Securities: Fortified After Two Event-Heavy Years
For investors looking for virtually no correlation to traditional asset classes, ILS now offer compelling pricing in light of past realized risks.