Ashton Global looks for long-short managers adept at generating alpha from both sides of the book. Emerging long-short managers, particularly those with less than 70% long bias and sector-focused strategies, represent a compelling opportunity for family offices and institutional investors.
The Alpha Advantage of Long-Short Strategies
Long-short equity strategies capitalize on investments in long positions in underpriced stocks while taking short positions in overvalued stocks. This dualistic approach offers a sophisticated mechanism to hedge against market downturns while grasping growth opportunities, aiming for a well-balanced portfolio that can do well under various market conditions.
We seek to identify emerging long-short managers capable of generating significant alpha — the measure of an investment's performance relative to a relevant benchmark — from both their long and short positions, thereby unlocking balanced, risk-adjusted returns for their investors.
Funds with Less Than 70% Long Bias are Seeing High Demand
A hallmark of the most attractive emerging long-short hedge fund managers is their maintenance of a portfolio with less than 70% long bias. This approach underlines a significant advantage — it ensures that the fund remains sufficiently hedged against market downturns, emphasizing the importance of alpha generation from both long and short positions rather than relying predominantly on bullish market conditions. By maintaining a balanced exposure, these managers demonstrate a prudence and risk awareness that family offices value, providing a smoother return profile and reducing the propensity for sharp drawdowns.
Sector-Focused Strategies: The Demand for Specialization
Emerging managers dedicated to long-short strategies within specific sectors are increasingly in high demand. Their specialized focus permits a specialized level of analysis, affording insights into the nuances and cyclicality of particular industries. Whether it's technology, health care, financial services, or renewable energy, these sector-focused managers possess the expertise to navigate the complex dynamics that drive value creation and risk within their chosen domains.
A sector-specific approach enables emerging managers to develop proprietary evaluation frameworks finely tuned to their target industries. This specialization fosters a more informed and niche investment process, resulting in a strategic edge that differentiates them from larger firms and increases their potential for alpha generation.
Ashton Global Seeks High-Quality Long-Short Emerging Managers
As the US stock market sits near all-time highs, the role of skilled emerging long-short hedge fund managers in achieving balanced and resilient portfolio growth cannot be overstated. Emerging long-short hedge fund managers adept at generating alpha from both sides of the book, maintaining less than 70% long bias, and focusing on sector-specific opportunities — stand out as compelling investments for family offices.
