Long Short Aggressive Strategy
Long Short Aggressive AIF funds deploy high-conviction long-short strategies with significant leverage (up to 2x NAV) and concentrated positions. They target high absolute returns by aggressively exploiting both long and short opportunities, making them suitable only for experienced investors with high risk appetite and long investment horizons.
- High Leverage: Up to 2x NAV permitted under Cat III AIF regulations
- Concentrated Shorts: 30–50% of portfolio in short positions
- Derivatives-Heavy: Options, futures used for leverage and directionality
- Target Returns: 20–35% absolute returns over market cycles
- Higher Volatility: Drawdowns can exceed 20% in adverse conditions
Risk Considerations
Aggressive long-short funds carry amplified risks investors must understand:
- Short Squeeze Risk: Short positions can cause unlimited losses theoretically
- Leverage Amplification: Losses magnified just as gains are
- Margin Calls: Forced unwinding of positions during sharp market moves
- Liquidity Risk: Lock-in periods prevent exits during drawdowns
- Manager Dependency: Returns highly dependent on individual PM's skill