Hedge funds are emerging from disruption caused by the coronavirus pandemic more resilient, adaptable, diverse, efficient, and productive, according to the Alternative Investment Management Association (AIMA).
The association's survey - which questioned 144 hedge fund managers globally throughout the pandemic - revealed funds have performed well and met investors' expectations throughout the most severe lockdowns, and are in a better position now than after the Global Financial Crisis.
The research, conducted in association with KPMG, revealed this resilience is partially due to acceleration of existing trends sweeping the industry and firms embracing change.
Additionally, 57% of hedge fund firms made hires or were looking to hire during the crisis, while 81% invested more in digital and IT capabilities.
A further 61% of firms agreed the rise in flexible and remote working had been a positive change.
Similarly to most businesses, hedge fund firms have increased the frequency of virtual meetings and recognised a need to modify physical workspaces over the coming months. One in five respondents agreed on the need to redefine business models to ensure the industry remains resilient as we move towards the ‘new normal'.
KPMG International global head of asset management Andrew Weir said: "Our research shows that a good number of hedge funds see this as a time to attract new talent to their firm. They are evaluating their existing operating model and adjusting their core processes, cost structures, and work environments so they are positioned to grow and meet the changing needs of investors."
KPMG International senior partner Joseph Fisher added: "Ultimately, hedge funds will find the right balance of a more decentralised environment with the necessary face-to-face interaction in the office.
"The ability to collaborate will unquestionably be a prime consideration as firms continue to adapt to the new reality."
AIMA global head of research and communications Tom Kehoe said: "The Covid-19 experience has proven that hedge fund managers operations' and their ecosystems are robust and fully adaptable, even during the most severe of lockdowns.
"This environment has created new opportunities for hedge funds; catalysing industry actors to adapt to a new reality. Investment in smart sourcing and enabling hybrid working practices will not only improve efficiency but also prioritises employee wellbeing. Ultimately this should benefit an industry that will emerge stronger and more diverse to sustain its future growth."
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