As both public and private markets enter a period of turbulence and drawdowns, hedge funds are set to prove popular with investors in the second half of 2022, as the recession and geopolitical volatility all play to the industry’s advantage.

As traditional investment managers increasingly dip their toes into the world of digital assets, having access to data and information in formats they recognise and understand is critical to their success.

As investors turn to hedge funds for portfolio insulation during market turmoil, commodities-focused strategies and event driven managers look to navigate fresh market volatility amid a worsening economic outlook.

The first-half stock market slump caught hedge funds off-guard, but most long/short managers remain confident they can ride out the storm.

After years of rising markets, the current economic reversal has placed alpha generation firmly in focus after hedge funds were hit by the first-half global turmoil.

Pension funds and other institutional investors closely focused on protecting their portfolios and seeking out sources of potential return in Q2 2022, despite ongoing volatility, as both bond and equity markets plummeted.

Hedge funds attracted marginally positive flows from investors last month, as the industry notched up a 3% weighted average gain in July following a torrid first half for investment performance.

​​​​​​​An overwhelming majority of macro hedge funds and trend-following managers are upbeat on their performance prospects for the rest of the year – but confidence among equity-focused firms has plummeted following 2022’s stock market upheaval.

Following a challenging second quarter, the hedge fund industry came back fighting in July, advancing 2.89% for the month, according to the Barclay Hedge Fund Index, with much of the uplift coming on the back of a seemingly improbable surge in global equity markets. 

Performance dispersion among hedge funds has narrowed in recent weeks, as almost 60% of managers generated profits in July – with long/short equity, event driven and relative value strategies all making gains, according to new industry data.