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Alternative Market Briefing

2026 Hedge Fund Outlook: Active over passive, but portfolio construction critical

Thursday, January 08, 2026

Matthias Knab, Opalesque for New Managers: Evanston Capital's 2026 hedge fund outlook reveals compelling opportunities across all major strategies as market dispersion, policy uncertainty, and deglobalization create alpha potential in an environment that strongly favors active management over passive approaches.

Today's investment landscape presents an intriguing paradox: while markets appear orderly on the surface, underlying dynamics are growing increasingly complex and fragmented. Technological innovation, deglobalization, and unpredictable policy shifts are contributing to a rapid pace of change with meaningful implications for the economy and the potential to deepen the divide between market winners and losers.

With equity valuations relatively high, benchmark indices increasingly concentrated, and credit spreads nearing historical lows, the environment strongly favors active management over passive strategies-extracting value from dispersion and identifying specific pockets of dislocation to capture alpha rather than riding broad market beta.

Long/Short Equity: A Stock-Picker's Renaissance

Several converging factors are creating an exceptionally favorable environment for skilled stock-pickers:

Expanding Dispersion Drives Alpha Potential

The dispersion between stocks-traditionally a harb......................

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