Event-Driven Hedge Funds Are The `Worst Disappointment,' Says K2
- Global macro funds also fell short amid low interest rates
- K2 has cut amount of allocations to event-driven hedge funds
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Event-driven strategies have been the most disappointing performers this year, said Robert Christian, head of investment research at Franklin Resources Inc.’s K2 Advisors, after many hedge funds failed to profit from mergers and acquisitions despite a record year for deals.
Funds have crowded into the largest corporate deals and have been reluctant to bet on smaller ones, said Christian, whose unit allocates capital to hedge funds and oversaw $10.5 billion of assets at the end of September. That contributed to low returns for event-driven hedge funds in a year that has seen a record number and value of deals such as mergers and acquisitions, he added. Global macro funds have also fallen short of expectations, he said.