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Credit hedge funds top investors’ ‘most wanted’ list, says Goldman Sachs

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Hedge fund firms that invest in credit are of more interest to allocators than any other strategy for the second year running, according to the Goldman Sachs prime services hedge funds insights and analytics team’s 2024 Hedge Fund Industry Outlook.

Despite a rally in both bonds and stocks last year, credit strategies – including investments in company debt, structured credit, and some sovereign instruments – remain top of the wish list for capital allocators, with 44% saying that they are planning to up their exposure, according to a Goldman Sachs survey.

Only 3% of those polled, meanwhile, are planning to decrease their exposure to credit strategies.

Distressed credit and long-short credit were last year’s sub-strategies of choice, according to the survey, which also revealed that allocators saw an average gain of 6.4% from their hedge fund portfolios overall between January and November 2023, up from a 0.9% loss in the same period in 2022.

The survey canvassed the opinions of 358 allocator firms globally, who control more than $1tn in assets allocated to hedge funds, as well as 302 of Goldman Sachs’s prime services hedge fund manager clients who collectively manage more than $1tn.

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