Higher public equity returns since 2009 are setting the stage for below-average returns in the coming years. Public equity is still the dominant factor in overall hedge-fund returns, and thus, JPMorgan expects hedge funds to face challenges over the near term. The environment for alpha generation remains difficult, but should improve over the intermediate term. Ultimately, JPMorgan is most bullish on event-driven funds, for which it projects long-term returns of 6.00%. The firm anticipates 5.50% returns for equity long-bias strategies, 5.25% for relative value, 5.00% for macro, and 4.25% for so-called "diversified" hedge funds. Private equity ("PE") looks more attractive...