Market-Neutral, Statistical-Arbitrage and Multi-Strategy Funds Hold 92.1% of Capital

Market-neutral, statistical-arbitrage and traditional multi-strategy crypto funds held 92.1% of capital, while directional funds held 6.7%.

The three groups represented fewer than half of the funds. Directional funds made up 44.3% of the total, while the average single-investment amount in neutral strategies was about 11 times the directional-strategy average.

Separately, active management has lagged passive beta products, including exchange-traded funds (ETFs). A gap in how investors discover and verify managers is one reason. Institutional money has flowed mainly into those passive products, while active-strategy fundraising still depends heavily on personal networks and conferences. Performance verification and comparisons with benchmarks lack standardization.

Eighty percent of surveyed asset allocators ranked asset security ahead of historical returns. Verified trading-platform data can strengthen due diligence, while managers identified hard-to-verify performance and lengthy compliance reviews as their biggest fundraising obstacles.

In October, Bitcoin (BTC) fell 7.2%. Directional funds averaged a 1.9% gain, while neutral strategies averaged a 1.0% gain.

Stronger verification systems and operational infrastructure are needed to draw more institutional capital into active management.