Market Environment in 2026 Strongly Favors Active Hedge Fund Managers Who Can Extract Value From Dispersion and Dislocation
Annual Evanston Capital Hedge Fund Outlook examines outlook for long/short equity, event driven, global macro and relative value strategies
EVANSTON, Ill., January 07, 2026–(BUSINESS WIRE)–Evanston Capital Management, LLC (“Evanston Capital”), an alternative investment management firm with more than $4.3 billion in assets under management, today released its annual Hedge Fund Outlook. The report, based on the firm’s extensive research on the hedge fund universe, provides insights into the four major hedge fund strategies – long/short equity, event driven, global macro and relative value.
“The environment strongly favors active management over passive—extracting value from dispersion and identifying specific pockets of dislocation rather than riding broad market beta,” said Adam Blitz, co-founder and co-chief investment officer.
Evanston Capital tracks leading and emerging hedge fund managers and their portfolios and compiles the report annually to offer institutional investors and financial professionals insights on which hedge fund strategies are well-positioned for the current environment. The report has taken on even greater interests given broader importance on the part of financial advisors looking to diversify portfolios beyond increasingly concentrated public markets.
“There is less competition today than in years past for differentiated, specialist managers who possess deep knowledge of their universe to add alpha,” said Kristen VanGelder, co-chief investment officer and primary author of the Outlook.
The report’s findings include:
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Among long/short strategies, whereas long positions were the dominant source of 2025’s alpha generation, Evanston Capital expects the source of value-add to become more balanced in 2026. Further, liquidity and trading flexibility will be key advantages amid market conditions that can create an illusion of liquidity.
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For event driven strategies, while some corporate activity was stalled by tariff uncertainty, Evanston Capital expects recent event momentum will carry into 2026 and circumstances are conducive to corporate events, at least through the first half of 2026.
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Global macro strategies should continue to benefit from the shift toward deglobalization that will lead to more varied economic conditions across countries, and correspondingly, a richer set of prospective trades for skilled macro managers—especially those that can optimize trade expressions across directional, relative value, and volatility dimensions. The firm also expects less stable correlations to present both challenges and opportunities.
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Opportunities exist for relative value managers with specialized, capacity-constrained strategies, modest asset bases, and disciplined use of financial leverage.
