L/S vs the rest

I've been scrolling through the HF section of WSO for a while now and it seems the only/main strategy talked about is L/S equity. Why is that? Is it because that's the new mainstream thing or other strategies like credit, macro etc , are too technical or difficult?

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It's perceived to be the most fun / spoken about. Its had a renaissance in the past 5 years with the "industrialisation of alpha" from the large mm risk models churning out hsd/ldd returns regardless of market environment - all whilst the tiger cubs struggled in 21/22 when tech beta took a beating on surprise inflation. On the flipside the l/s fundamental strategy feels like it's at capacity. Aum levered to l/s equities is unlikely to 2x from here. Crowding is an issue. Seems like the large mm platforms are looking to scale though 3rd party allocations and other uncorrolated strategies. I'm in the peak pod camp but arguably the same was said 15 years ago before they had their golden moment. 

 
  • AUM is very high, opportunities more abundant
  • It's got a lower "barrier to entry' compared to other areas, meaning IB, ER, maybe S&T, and other people can all join compared to something like global macro or distressed that requires a more niche specific background
  • fun
  • Performance has been great over the past couple years
  • Other large fund types(mainly quant) tend to other areas of the internet like reddit or quantnet

 

No. They're 2 different areas. Quant is really overused as a term. Everything will slowly converge to more "quant" just because we're in an era of data, and for that reason I don't recommend getting a finance/econ degree anymore, or at least getting a math/stats/data science/cs minor with it. But quant itself won't replace L/S. Just move it. 

 

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