Why are big macro names so allergic to being long equities? “Oh no no no. We are serious people here, sir. We do ‘sophisticated’ trading here.”
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how do you reconcile this with many of the large long short equity managers running net long betas and still getting paid 2/20 despite half of their returns something you could get for free?
I don’t know! As someone who meets a lot of investors for a quant fund it is infuriating that they are so laser focused on our net equity exposure, while equity L/S runs 40% deltas no questions asked
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Maybe it’s a bucketing thing? Global macro and quant is seen as defensive or fixed income replacement whereas L/S is in a “growth” bucket? But when I chat to ppl in a similar position in global macro shops, they get a similar level of heat from investors.
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l/s equity investors are the best marketers. Everyone loves a stock picker. Buffett zeitgeist, the whole parade of "we had 629 management meetings this quarter literally can't go t1ts up". Pointing to an army of guys updating excel spreadsheets as "growing talent pool" etc.
End of conversation
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In fairness the secular trends in alternatives have been to dump pure quarter-caller equity L/S for exactly the reasons mentioned above and reallocate towards private assets, this trend reversed somewhat during covid but too soon to say it's ended imo
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