The entire video is narrated by David Richter.

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The video starts with a grayscale cityscape playing in the background, GCM Grosvenor’s logo is centered in white over it and the tittle “Hedge Funds: Separating Myth from Reality” appears in white text in the center of the screen. There are important disclosures at the bottom of the screen. “GCM Grosvenor (NASDAQ: GCMG) is a global alternative asset management solutions provider across private equity, infrastructure, real estate, credit, and absolute return strategies. Investments in alternatives are speculative and involve substantial risk, including strategy risk, manager risk, market risks, and structural/operational risks, and may result in the possible loss of your entire investment. Past performance is not necessarily indicative of future results. The views expressed are for informational purposes only and are not intended to serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities by GCM Grosvenor. All expressions of opinion are subject to change without notice in reaction to shifting market, economic, or political conditions. The investment strategies mentioned are not personalized to your financial circumstances or investment objectives, and differences in account size, the timing of transactions and market conditions prevailing at the time of investment may lead to different results. Certain information included herein may have been provided by parties not affiliated with GCM Grosvenor. GCM Grosvenor has not verified such information and makes no representation or warranty as to its accuracy or completeness.  

GCM Grosvenor’s latest white paper is a useful resource

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for anyone interested in hedge fund investments

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because it effectively separates myth from reality.

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The video transitions to a shot of David Richter sitting in front of an office window. His name and title, Managing Director – Absolute Return Strategies, appear on the lower third in white text.

Hedge funds often carry an air of intrigue,

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with the narratives ranging from potentially spectacular

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returns to lackluster performance,

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and often include broad generalizations.

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Our white paper, Hedge Funds: Separating Myth from Reality

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dives deep into the data to bring you clear insights,

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and we try to present them in a very readable format.

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The video changes to an on screen graph titled “Hedge funds have consistently outperformed cash by at least 3.5% throughout history”. The y axis shows percentages ranging from 0-30% at 10% intervals, and the x axis starts in 1992 and goes through 2022 in intervals of 2. There are several callouts in the plotted data, 1990s average was 13.7%, 2000’s average was 5.5%, 2010’s average was 4.5% and 2020’s average was 4.9%. The source information is listed below the graph. The source is GCM Grosvenor, HFR and FTSE. Returns as of March 2024. Spread between the trailing 3yr annualized performance of the HFRI FW Composite Index and U.S. 30 month T-Bills. Past Performance is not necessarily indicative of future results. No assurance can  be given that any investment will achieve its objectives or avoid losses.

One main theme we explore in the paper is

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hedge fund performance.

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Hedge funds, in aggregate, have consistently outpaced both

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cash and fixed income by sizable margins.

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The video transitions back to David.

And while broad media headlines tend

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to focus on specific periods of disappointment

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or volatility for the industry,

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over reasonable measurement periods,

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hedge funds have historically delivered strong absolute

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and risk adjusted performance with positive convexity

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to traditional market,

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The video changes to a stock clip of a ticker rolling.

meaning hedge funds typically capture only a small portion

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A quote appears over the ticker footage “Hedge funds typically capture only a small portion of the downside when markets are down sharply, but a more robust portion of the upside when markets are up.”

of the downside when markets are down sharply,

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but a more robust portion of the upside when markets are up.

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The video changes back to David.

This favorable asymmetry is

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what we mean when we say convexity.

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We also debunked several myths related

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The screen changes to a greyscale cityscape video with “Myth: Hedge funds have experienced disappointing performance since the Global Financial Crisis” written in white text on screen.

to hedge fund performance, such as the belief

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that hedge funds have experienced disappointing performance

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since the global financial crisis

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The myth text changes to read “Myth: High single digit returns with low market correlation are out of reach.”

and that high single digit returns

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with low market correlation are out of reach.

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The on screen text switches to “Reality: Hedge funds have historically, and recently, performed better during periods with non-zero interest rates and normal levels of dispersion.”

In reality, hedge funds historically

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and recently performed better during periods

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with non-zero interest rates

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and normal levels of dispersion.

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The on screen text switches to read “Reality: Hedge funds have shown the ability to mitigate losses to capital during the most challenging periods for traditional assets.”

And as mentioned, hedge funds also have shown the ability

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to mitigate losses to capital

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during the most challenging periods for traditional assets.

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The video switches back to David.

Our white paper also affirmed several realities, including

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The video changes back to the greyed out cityscape with text reading “Reality: Positive security selection has been the driver of strong recent hedge fund alpha, with less reliance on equity beta and other common factors.”

how positive security selection has been the driver

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of strong recent hedge fund alpha

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with less reliance on equity beta and other common factors.

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The video changes back to David.

Finally, in the full piece,

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we illustrate why we believe having hedge funds in today’s

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environment is especially important

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and can deliver strong returns while taking only modest

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directional or illiquidity risk.

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The video changes to a different cityscape with the text “This makes a hedge fund portfolio an attractive midpoint between highly liquid traditional asset classes and less liquid alternative asset classes.”

This makes a hedge fund portfolio

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and attractive midpoint

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between highly liquid traditional asset classes

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and less liquid alternative asset classes.

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The video switches back to David.

Download the full white paper today to understand

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how hedge funds can fit into your investment strategy

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and why now might be an especially opportune time to invest.

The end screen is a drone shot moving over the Chicago River with the text “Download ‘Hedge Funds: Separating Myth from Reality’ at GCMGrosvenor.com. Questions? Contact [email protected]” overlayed. It eventually fades out to a blue background with a white GCM Grosvenor logo in the middle.