In the hedge fund space, multi-strategy funds such as Millennium and Citadel play a leading role. These funds take a diversified approach, investing in different strategies across different asset classes through multiple independent teams, each managing a specific mandate.
Their goal is for each team to deliver low but very consistent performance and use significant leverage so that the end result is attractive to their clients. To achieve this, they take an extremely strict approach to risk management: a team can be fired if its rating drops by just a few percentage points.
In recent years, multi-strategy funds have not only demonstrated resilience, but also stood out in terms of performance and capital raising. Their success can be attributed to a combination of strategic flexibility, the expertise of experienced portfolio managers and their risk management.