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Geopolitical shocks from the Middle East conflict, a sharply weaker US dollar, and a fierce battle for institutional mandates all defined the week. Against this backdrop, hedge fund performance diverged sharply by strategy, with macro and long-short equity managers generating very different outcomes. Opalesque reporting this week provided critical context on portfolio concentration risk, the UK regulatory reform of short selling, and new SEC crypto guidance.
Opalesque Exclusives
Portfolios are more concentrated than you think: BlackRock explains why, and four managers show the fix
In what may be the most important allocation warning of the year, BlackRock is cautioning institutional investors about a pervasive "diversification mirage." The firm argues that AI-driven disruption is now cutting across virtually all asset classes simultaneously, meaning that portfolios which appear diversified by sector or geography are in practice carrying far higher correlation risk than investors realise. At an Opalesque webinar, four niche and specialist managers illustrated what genuinely uncorrelated alpha looks like in practice today. The message is direct: conventional multi-asset construction is increasingly insufficient, and investors who rely on historical correlation data are likely understating their true concentration exposure.
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