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Hedge fund LPs want more quant funds and less fees

Deutsche Bank's 15th annual survey of the industry reveals that half of the top ten most in-demand strategies were systematic, with a rapidly growing appetite for quantitative macro funds.

“In order to stay in the game, managers either need to embrace quantitative strategies by changing, not necessarily their investment philosophy, but their investment process — or they need to narrow their focus to more niche opportunities where there’s a little more edge and which haven’t yet been disrupted by systematic strategies,” Naidoo said. Also facing disruption is the relationship between managers and investors. Deutsche Bank noted that limited partners (LPs) are not only demanding better alignment of interests in terms of fees, they also want access to key decision-makers like fund CIOs.

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capital markets