Hedge Funds Take a $23B Hit as Outflows Surge

By Lydia Tomkiw  July 5, 2023

Chris Cutler discusses allocators’ growing substitution of capital between lower volatility hedge funds and private credit strategies in FundFire:

Investor interest has increased in other areas outside of hedge funds, such as private credit, said Chris Cutler, president of Manager Analysis Services.

“I think there is some substitution among hedge funds and private credit going on,” he said. “Allocators that are reluctant to pay hedge fund fees may be willing to pay somewhat diminished fees in private credit.”

And while multi-strategy hedge funds remain attractive to investors, it may be “difficult” for fundamental hedge funds to attract additional capital, Cutler added.