The hedge fund industry as a whole has lost 5.36% for the year to May, but one quarter of funds are up by an average of 20%, according to eVestment, which is owned by Nasdaq. Where are these returns coming from and how is the opportunity set evolving?

In equity long/short, the best positioned funds include some technology-oriented ones that have for many years been long of disruptive technology trends, such as ecommerce and payments, that have been accelerated by Covid-19. There are also a variety of equity hedge funds that have been adept at tactical trading, battening down the hatches in February and March and then rebuilding exposure at lower levels. Equity managers are confident about picking winners and losers in a new climate that will certainly involve more regulation of many industries, and at some stage is likely to see more taxation to repay government borrowing.