Hedge Funds: We Need More Time than Investors Think to Boost Returns Amid Rising Rates

For most of this year, all eyes on Wall Street have been on the Federal Reserve, monitoring regulators' interest-rate moves. Month after month, copious amounts of news headlines trumpet the Fed's latest decision regarding rates and responses to inflation.

Of course, interest rates dramatically impact investment returns in different ways depending on the asset class. In the case of hedge funds, higher interest rates tend to boost returns, but only during periods of stability.

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Thus, it comes as no surprise that investors expect the fund managers they invest with to drastically improve their returns as rates rise. However, while fund managers agree that their returns should improve with higher rates, they disagree...