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Largest hedge funds increasingly buy alpha ideas from smaller managers

A report by Bloomberg describes a growing market where smaller hedge fund managers are paid to provide alpha signals to larger multi-strategy firms.

Reported · Written up by our desk · Fund Industry

Hedgeweek reports that the largest multi-strategy hedge funds are turning to investment ideas outside their own trading operations as they seek alpha.

According to Hedgeweek, a growing market has emerged in which smaller hedge fund managers are compensated to supply alpha-generating signals to bigger firms.

The shift reflects a broader effort by major hedge fund players to diversify where they source trading inputs and investment edge, Hedgeweek said, citing a Bloomberg report.

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