Style drift, which is defined as a shift in a manager’s investment strategy, continues to be an area of interest and concern among the investor community. In fact, it was discussed in our 2016 Investor Roundtable discussion, where industry experts shared their insights on this topic. That’s why Hedge Fund Legal & Compliance Digest recently wrote an article that addresses the defining characteristics of style drift, causes of style drift, and how managers should proactively and reactively respond to cases of style drift. This article, “Catching the Drift: Legal and Practical Considerations for Hedge Fund Managers Who Deviate from Their Stated Investment Strategy,” quotes Michelle Chopper, Director of Advisory & Consulting services at Arthur Bell, who also wrote “Investors: Catch their style drift?”
Due to a range of repercussions for style drift, investment managers must be vigilant in monitoring their investment strategy and taking the appropriate steps to address any significant change in their strategy.