The Hidden Alpha

Despite record settlements and straightforward economics, just 7% of hedge funds systematically participate in securities class action recoveries. A further 14% participate case-by-case, meaning four in five funds leave money on the table entirely.

This analysis, based on extensive surveys of hedge fund managers across North America, Europe and Asia-Pacific, reveals a paradox: the barrier isn’t awareness or economics, but psychology. Cost considerations and expertise requirements, each cited by 45% of participating funds as decision factors, create a perception barrier that far exceeds the actual implementation burden.

There is more than $15 billion dollars in settlements—waiting to be claimed—by anyone willing to file the paperwork. The question is whether more eligible institutional investors will recover what they are rightfully owed.