“Simplicity is the ultimate sophistication.” — Leonardo da Vinci
A hedge fund manager’s toolkit is unusually broad. Long and short positions, derivatives, corporate actions, index events, and leverage can all play a role. Popular culture has added to the sense of complexity: films such as The Big Short and series such as Billions often portray hedge fund returns as the product of one clever insight expressed through an exotic trade. That makes for good television, but it is not how an absolute return mandate is typically delivered through a full market cycle.
Author: Marcus Erlank, Director & Hedge Fund Portfolio Manager, Catalyst Fund Managers
