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Janet Cowell: We think hedge funds can reduce risk in the long run (Illustration by Bryan Regan) |
Equity-focused strategies have lost favor of late as uncertainty and volatility last year made it harder for traditional stock pickers to succeed. A dearth in M&A activity hasn’t helped, as event-driven equity strategies have become less lucrative. The AR Event Driven, Global Equity and U.S. Equity indexes were some of the worst performers of 2011, losing 5.21, 4.70 and 2.09 percent, respectively.
What a difference a month or two makes. The S&P 500 had its best January in 15 years, returning 4.36 percent. It rose another 4.06 percent in February. If that amounts to an inflection point, one large pension fund’s new bet on long-short equity and event-driven managers will prove to have been fortuitously timed. But the operative word here is...