With the bull market over, global equity players are reformulating their strategies
By Pete Gallo
For the past five years, global long/short managers had only to ramp up their net long exposure to post big gains. Since 2003, a robust global economy has pumped up equity values around the world - from Europe and the United States to Asia and Latin America - helping global stock funds net an average annual return of 13.27%, according to the Absolute Return database.
This year, the game has changed. With credit woes depressing global stock markets into double-digit losses, hedge funds investing in equities have had to rethink their portfolios. "The last few years were a good time for global equities. Then, following the subprime issue and credit fears and the liquidity issues, that has been less true. You went from everything with long exposure working to just about nothing working," says Virginia...