The good news is that some hedge funds still want human beings. The bad news is that – based on assets under management – not all hedge funds will want as many human beings in future.
This is the message from Deutsche Bank’s latest Alternative Investment Survey. The bank asked 460 ‘global hedge fund allocators’ who collectively manage $1.9 trillion in assets how they plan to change their allocation between hedge fund strategies this year. The results are shown in the charts below.
Discretionary macro is the big winner – which should be good news for the likes of Brevan Howard. Fundamental equity is the big loser, which looks like bad news for the likes of Odey – although net, more investors plan to increase allocations to fundamental equity than withdraw them, suggesting allocators are going to be choosy.
Quant funds, meanwhile are on the up. And the computers are coming – but not especially fast: only 12% of respondents planned to increase allocations to artificial intelligence funds this year.