News Digest:

Amidst volatile global markets and significant macro shifts, smaller, nimble hedge funds may be better positioned for success, according to Alfonso Peccatiello, Founder & CIO of Palinuro Capital. Speaking ahead of the Funds of the Future Summit, Peccatiello highlighted that the current environment, marked by unprecedented fiscal stimulus and geopolitical uncertainty, creates opportunities for funds with adaptable frameworks.

He noted that larger institutions often struggle to react quickly to rapid changes, whereas smaller managers can engage in a wider array of less competitive markets and spot emerging trends with greater agility. Peccatiello, who also founded the macro research platform The Macro Compass, emphasized the importance of transparency and aligned incentives for newer managers seeking to attract investors. He suggested providing daily performance access, mimicking Separate Managed Accounts (SMAs), to build trust.

While acknowledging the challenges of fundraising, Peccatiello highlighted building relationships with institutional investors through content sharing as a successful, albeit rare, path. He also pointed to the potential for a significant sell-off in the long-end bond market due to fiscal spending and geopolitical risks, a scenario many investors are unprepared for, further underscoring the need for adaptable investment strategies favored by smaller funds.

End Notes

Source: https://www.hedgeweek.com/nimble-by-design-why-smaller-hedge-funds-may-thrive-in-todays-chaotic-markets/