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A little over a year ago, AllAboutAlpha and media partner Terrapinn conducted a landmark survey of institutional investors, asset managers and service providers on what was then one of the most anticipated developments in the asset management industry: 130/30 investing. A lot has changed over the past year. As anticipated by respondents last year, many new funds have been launched. But performance has been lackluster. Many attribute this to negative returns for both the beta component of these funds and ...
Canadians aren't naive. They know why the global hedge fund community has beaten a path to their door over the past few years. It starts with "energy..." and ends with "...and basic materials". While they bristle at the moniker "hewers of wood and drawers of water", Canadians have been the beneficiaries of a global energy and basis materials boom for several years. And as the Chairman of AIMA's Canadian chapter, Phil Schmitt, argued last year, that's okay with them - ...
Portable alpha offers sophisticated investors the opportunity to step beyond the limitations associated with traditional asset management. This investment approach generally offers more tools, fewer restrictions on market opportunities and greater potential to exploit market inefficiencies. Together, these benefits provide the potential for improved portfolio efficiency, enhanced risk controls and higher expected returns. As the market leader in the Portable Alpha space Morgan Stanley has been educating its clients on the benefits of Portable Alpha for years. As an industry partner to AllAboutAlpha.com for over a year, Morgan Stanley has provided registered users with a collection of white papers , articles and webcasts that help demystify the topic - much of which is provided to clients only. To view the following research papers and more, simply register for our free "Alpha Mail" service and login at the ...
This bad...
The following series of scatter plots are based on data from Hedge Fund Research. As you can see, the urban legend that hedge funds "deliver absolute returns in good times and bad" was clearly never supported by the historical evidence. The following chart stacks the broadest index available, the HFRI Fund-Weighted Composite, against the monthly S&P 500 returns (since January 1990). The black line is the linear regression (the slope of which is the ...
Despite begin caught with their hands in the beta cookie jar last quarter, hedge funds had one of the best relative performances ever in Q3 - beating equity indices by a country mile. Most industry participants acknowledge that various "alternative betas" and even, as we have recently seen, traditional betas have found their way into hedge fund returns. And some now attribute hedge funds' returns since 2003 as simply repackaging beta and selling it at ...
We've been waiting for the markets to cool down so we can get back to our primary focus here at AllAboutAlpha.com, the ongoing evolution of the asset management industry. But with breaking stories overwhelming the new cycle nearly every day now, that time never seems to arrive. Still, today we take a much needed break from the all-too-familiar apocalypse countdown and examine an intriguing new fund that may be the poster child for what emerges ...
The Bank for International Settlements in Basel, Switzerland is likely abuzz this week watching history unfold before its eyes. After all, one of the lynch pins of the organization's Basel II Accord was the requirement for banks to mark-to-market all assets - including less liquid ones. And it appears that doing so in a leveraged environment has put several banks into a death spiral in recent weeks (see featured post below).
But the BIS is also ...
It is often said that there are approximately 12,000 hedge funds in the world today (or at least there were until recently). But often overlooked is the fact that many of these funds are managed by the same hedge fund company. When most people think about a hedge fund, they implicitly think about the management company itself, not the legal organization of the assets managed by it. On this score, there are roughly 3,000-4,000 hedge ...
With so much breaking news to digest recently, it's difficult to find the time to look down the road at what's coming next for the alternative investment industry. Critics of hedge funds often evoke images of the fictional Lake Wobegon where the children "are all above average". But the current market crisis may finally help us all move beyond this tired metaphor. To begin with, the FT peered into the crystal ball last week to predict ...
As we wrote in August, hedge funds seemed to be repositioning themselves for a down market. According to the Hennessee Group, average net (dollar) exposure had fallen from a high of around 55% in mid 2007 (the market peak) to 35% by mid 2008. Regardless of whether this means hedge funds can tel the future or not, shifting net exposure like that is obviously a useful skill. The mere fact that funds kept pushing down ...
The short-term future of 130/30 funds has been thrown into doubt as a result of the short selling ban over-staying its welcome. Consultancy the Tabb Group made headlines last year with its prediction that the market for 130/30 funds would reach $2 trillion by 2010. But according to a Financial News report on the weekend, "...Larry Tabb, chief executive of Tabb, said: "I do not see how these funds can work if they can't short. ...
