Portable Alpha: A Glimpse at the Future
| Sep 19th, 2006 | Filed under: Portable Alpha & Alpha/Beta Separation | By: Alpha Male |
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By: Milton Ezrati, Lord, Abbett & Co.
Published: Fall 2006, Journal of Investing
Milton Ezrati (see previous posting on his work) shows us in this article that alpha-centric investing is about much more than just hedge funds. In fact, it appears that Ezrati would agree with AllAboutAlpha.com that hedge funds are just one symptom of a far bigger trend in money management.
Says Ezrati:
“Investors can employ portable alpha strategies without turning either to hedge funds or to leverage or any of these particular risks. In time, as this difference becomes apparent, the investment community will begin to embrace the advantages of portable alpha. The approach will gain greater currency, inside and outside hedge funds, and will begin to edge out more traditional approaches to investing, most especially the more conservative traditional investment managers.”
“Once the coming hedge fund shake out runs its course and investors return seriously to consider the fundamental contribution of portable alpha strategies, whether implemented in hedge funds or not, portable alpha should begin to offer a more lasting challenge to more traditional investment approaches.”
He suggests that advances in “techniques and systems” will enable this evolution…
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