(Bloomberg) Poor performance by hedge funds continues to be a hot topic, but no one wants to take the blame for low returns.
A survey conducted by Morgan Stanley Equity Strategist Adam Parker highlights the ostrich-like way much of the hedge fund industry is dealing with its recent inability to generate the elusive outperformance known as alpha.
“We surveyed a group of long/short fundamental equity hedge fund managers at one of the conferences, asking them for the primary reason for poor performance of their industry,” he writes. The top response received by the analyst was “crowding,” or where a large number of investors are in the same trade, followed by “factor exposures,” or losses based on certain risks involved in a position.
