One of the oldest and best-known hedge fund strategies has suffered nearly $150bn in client withdrawals over the past five years, as investors tire of their inability to capitalise on bull markets or protect them during downturns.
When Lansdowne shut its flagship Developed Markets equity fund in 2020, after admitting it had become hard to find stocks to short, many saw it as a sign of a deep malaise in the sector. Long-short managers complained for years that ultra-low interest rates allowed weaker companies — which would previously have been excellent targets to short — to stumble on for longer and, in some cases, for their share prices to soar. That, they said, made it harder for them to profit.
Source: Financial Digest (financialdigest.net)