Hedge funds offer qualified investors a unique partnership. While hedge funds first began as a way to offer investors a balanced – or market-neutral – approach to investing, the methods have evolved through the years. This presentation focuses on one of those strategies, long / short funds.

1. Hedge Fund Strategies 101:
Long/Short Equity Funds
Hedge Fund Fundamentals | January 2015

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Introduction
Hedge funds offer qualified investors a unique partnership, with the ability to invest
alongside them.
While hedge funds first began as a way to offer investors a balanced - or market-neutral –
approach to investing, the methods for delivering returns have evolved through the years.
This presentation provides a brief overview of some of the strategies used by hedge funds in
the marketplace today.
Topics:
• Investment Strategies
• Long/Short Equity Funds
• New Hedge Fund Partnerships
• Resources

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Hedge funds offer investors a broad range of investment options. No two
hedge funds are identical, but funds can be categorized broadly by the
type of strategies they employ.
While the individual investment decisions made by each fund vary,
hedge funds are united by the same fundamental goals:
• Portfolio Diversification- Prevents over-concentration in specific assets.
• Risk Management – Helps anticipate and avoid volatility in the marketplace
• Reliable Returns Over Time – Provides opportunities for asset growth
Investment Strategies

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Long/Short Equity Funds
Investment managers maintain long and short positions in equity and equity
derivative securities.
Managers employ a wide variety of techniques to arrive at an investment
decision, including both quantitative and fundamental analysis.
Strategies can be broadly diversified or narrowly focused on specific sectors
and can range broadly in terms of levels of net exposure, leverage employed,
holding period, concentrations of market capitalizations and valuation ranges
of typical portfolios.
According to Preqin’s 2014 Report on Hedge Funds long/short equity funds
represent 55 percent of all funds under management by the industry.
Source:2014 Preqin Global Hedge Fund Report

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Institutional Investors Seeking Out New Hedge
Fund Partnerships
According to Preqin’s 2014 Global Hedge Fund
Report, investors expect to increase hedge fund
allocations to their existing portfolios over the next
12 months.*
Beyond multi-manager funds, public pension funds
are the most active type of institutional investor
seeking new hedge funds, with the proportion of the
total number of fund mandates issued by this group
rising throughout the year. This is in line with recent
growth trends, which indicate that in 2007, around
196 public pension funds invested in hedge funds -
today that number is around 377.
The accompanying chart outlines how investors are
expected to allocate – by strategy – over the next
12 months.**
Source: 2014 Preqin Global Hedge Fund Report
**Data for 2015 will be updated as soon as published.

6. 4 Resources:
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For more information on hedge fund strategies, visit:
1. Managed Funds Association or www.managedfunds.org
2. Hedge Funds 101
3. Hedge Fund Strategies: An Overview of the Various
Investment Strategies Offered by Hedge Funds in the
Marketplace Today
4. Hedge Fund Research Strategy Definitions