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Cambridge Business Magazine: Few hedge fund managers deliver big returns and manage systemic risks


Only a few skilled hedge fund managers can consistently deliver “alpha” returns while managing systemic risk, finds study co-authored by Raghavendra Rau, Sir Evelyn de Rothschild Professor of Finance at Cambridge Judge. “Many hedge fund managers claim that they earn absolute returns that are unaffected by the risk of the market,” said Rau. “In fact, this is not easy, as systematic risk commonly goes up during market downturns. But our study shows that it’s possible, at least to some extent, to identify funds that are good at managing systematic risks.”

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