Barclays: Flexibility Has Helped Multi-Strategy Hedge Funds Outperform

The multi-manager hedge fund sector is booming. These firms, also known as multi-strategy hedge funds, employ a decentralized investment decision process made by autonomous portfolio managers who independently manage pools of capital. Some of the biggest names in the sector are Millennium, Citadel, Point72, Balyasny and Schonfeld.

According to data collected by HFR, multi-strategy funds now look after $890 billion, making the sector bigger than standalone global macro funds. Assets have ballooned from less than $400 billion in 2010 when multi-strategy funds looked like the unloved cousins of fund-of-hedge funds (FoF). Today, FoFs look like the unloved cousins of multi-strategy funds. Assets in FoFs have trended sideways since 2010, even as assets across the rest of the hedge fund industry (and...