(Evestment)
Hedge funds are attracting smaller flows in 2016 than in years past. High-net-worth investors are diversifying more broadly outside of the hedge fund space, through liquid alternatives and other similar vehicles. Last year, few hedge fund strategies were successful in delivering consistent returns. This makes for a challenging situation where managers are trying to both retain clients and develop new business.
To communicate your strategy most effectively to HNW clients, you have to be mindful of the comparisons that individual investors make when looking at performance and risk. Unlike institutional investors, HNW clients mostly compare their performance to major stock indices, such as the S&P 500. By giving this side-by-side comparison, the performance of your hedge fund is put into the same context.
