BlackRock’s dedicated hedge fund solutions team has been evaluating and investing in hedge funds since 1995. The HFS team’s expertise extends across the universe of hedge fund managers and strategies, as well as hedge fund-sponsored co-investments.
Hedge Fund Solutions (HFS)
Why Hedge Fund Solutions?
Access to high-conviction hedge funds
Significant experience in early manager identification and demonstrated access to hard-to-access investment opportunities.
Extensive information channels
Leverage expert insights and global professional networks of BlackRock to further inform investment decisions.
World class risk management
Harness proprietary risk management tools to measure, understand, and manage risks within hedge fund portfolios.
Hedge funds can influence portfolio outcomes in a number of ways
Hedge funds are important in investors’ portfolios because they can play a variety of different roles. But in all cases, the right hedge funds should provide alpha or idiosyncratic sources of risk and return that are generally uncorrelated to traditional markets, like equities and fixed income.
Performance dispersion is significant across hedge funds
Selecting the right hedge funds, that demonstrate strong, consistent performance is critical to the outcome of a successful hedge fund program, given the wide dispersion in returns between the top and bottom decile managers.
Selecting hedge fund managers is hard and labor intensive
Identifying and selecting the best hedge funds requires a significant amount of expertise, time, and effort. HFS’ dedicated investment team leverages the experience and expertise gained from building and managing successful hedge fund programs across multiple market cycles for our investors.
Harnessing Alpha
The uncertain and volatile macro environment demands a flexible approach, underscoring the case for hedge funds and calling on extensive expertise and strong relationships within the industry to deliver on performance objectives.
Our disciplined investment approach is focused on four core principles
Fundamentally understandan investment manager’s strategy
Align incentivesbetween the investment manager and the investor
Exercise independent judgementrather than “follow the herd”
Focus on market inefficienciesas a core source of risk and return
Why BlackRock for multi-alternatives?
Our Multi-Alts platform is designed to identify and solve clients’ needs by harnessing expansive investment insights, unique sourcing, and deep risk expertise to enhance outcomes. We take an open architecture approach, partnering with BlackRock and non-Blackrock investment teams, to deliver optimal portfolio solutions to address client needs.
Investment Strategies
DPO can provide additional diversification to core private exposures
Variation across risk factors
While “core” alternatives are driven primarily by major economic risk factors, a portfolio of emerging assets can be diversifying and complementary.
Low beta to public markets
Emerging assets can offer returns with low correlation to public markets, relative to traditional asset classes.