00:00Now, large hedge funds are seeing their biggest gains in decades due to the global market rally.
00:06Bridgewater's flagship fund is on track for its biggest gain since 2010, up 26 percent in the first nine months of the year, crushing the market.
00:15Bloomberg's Nishant Kumar covers hedge funds for us here at Bloomberg, joins us at the desk.
00:20You visiting from London. Great to have you here.
00:23I'm so happy that we can talk about a hedge fund that's outperforming even the S&P 500,
00:29because normally we have to make all these caveats that that's not their benchmark, right?
00:33Yeah. But they're doubling it.
00:35Let's still say that that's not the benchmark.
00:37Of course, Bridgewater, as you said, is having its or on track to have its best year in 10 years.
00:44But it's not only Bridgewater.
00:45If you look at our table, which is, of course, not comprehensive.
00:49And these are just the first look within the first two days of the month.
00:53You have macro fund. You have credit fund. You have a systematic fund.
00:57You have multi-strategies. So all sorts of bottom who just bought spies, right?
01:01Yeah. But all sorts of relevant strategies are firing up.
01:06Right. So it's in hedge fund.
01:08It's never about hot and cold, you know, market for for these hedge funds.
01:13You go to hedge funds to avoid that temperature differential.
01:18It's not about getting burnt or freezing to death.
01:21You are looking for a perfect spring throughout the year.
01:24But what has been working? Because you could make the argument that just buying and holding has also been an outstanding strategy this year, whether it be in credit, whether it be in stocks.
01:35So what are they doing to add extra alpha when beta already looks fantastic this year?
01:40Yes. So the bulk of the portfolio for institution, you can go to beta.
01:45But this is about, you know, what happens if the market crashes?
01:49What happens if 2008, which has been a very long time and the history of markets will tell you that, you know, this time it has gone for too long, actually.
02:00So periodically it happens. What happens during those periods? That's why you buy hedge funds.
02:05Well, and I mean, that will be the interesting, the more interesting look, right?
02:10Seeing them outperform in a good year isn't as impressive as seeing them outperform in a crash.
02:16And it doesn't have to be 2008. You know, it can be 2022.
02:19Yeah, absolutely. I mean, we'll see. I mean, this year has not been easy.
02:24Yes, on a net base, you can say, but there has been a lot of volatility.
02:29So you have to look these returns from that angle as well.
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