Long Only Alternative Investment Funds (AIFs) are investment vehicles that primarily focus on long-term investments in various asset classes. These funds typically aim to generate returns by investing in stocks, bonds, commodities, or other securities, with the objective of profiting from the upward price movements of these assets over time.

Unlike traditional mutual funds or equity funds that have restrictions on short selling or taking bearish positions, Long Only AIFs solely participate in long positions, which means they only buy and hold assets with the expectation of their value appreciating in the future. These funds are suited for investors who have a positive outlook on the market and seek to benefit from overall market growth.

On the other hand, Long Short Alternative Investment Funds (AIFs) employ a flexible investment strategy that allows them to take both long and short positions in various asset classes. These funds aim to generate returns by simultaneously betting on assets that they expect to increase in value (long positions) and assets they anticipate will decline in value (short positions).

By taking short positions, which involve borrowing and selling assets they do not own in the hopes of repurchasing them at a lower price later, Long Short AIFs can profit from falling markets or specific asset price declines. This strategy provides opportunities for potential gains in both bullish and bearish market conditions, as the fund managers actively manage the portfolio to capture relative value disparities and exploit market inefficiencies.

Long Short AIFs are suitable for investors seeking a more dynamic investment approach that allows them to potentially generate positive returns even in volatile or declining markets. The ability to hedge against market downturns or capitalize on specific investment opportunities sets Long Short AIFs apart from traditional long-only investment funds.