Shark Attacks, Fast Food, Bad Drivers and No Place to Hide
| Dec 12th, 2006 | Filed under: Portable Alpha & Alpha/Beta Separation | By: Alpha Male |
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This is the final dispatch from Alpha Male’s road trip to Institutional Investor’s Alpha Generation Forum in New York last week.
I’d be the first to admit alpha centric investing (portable alpha, active overlays, 1X0/X0 strategies, hedge funds, ETFs etc.) can be brutally boring sometimes.
But to their credit, the speakers at this event kept us all awake without need for intravenous caffeine drips or too many of those jam-filled conference pastries. I found three of the speakers to be particularly engaging – mainly due to their enthusiasm about what they see as a fundamental shift toward alpha-centric investing: Mark Baumgartner, Executive Director of Morgan Stanley’s portable alpha group, Angelo Calvello, the newly-minted North American EVP at Man Investments, and Laurence Siegel, Research Director for the Investment Division of the Ford Foundation.
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[...] When Donald Putnam (co-founder of Putnam Lovell) speaks, people listen. So when he brands ETFs a “disruptive technology”, you know someone is in for a rough ride. In this case, it’s mutual funds. Like Morgan Stanley’s Mark Baumgartner and like us at AllAboutAlpha, Putnam views recent financial trends as fundamental game-changing “technological” innovations. [...]
[...] Calvello’s bundled solution essentially addresses a need first identified by Morgan Stanley’s Mark Baumgartner for portable alpha to “cross the chasm”, as they say in Silicon Valley, between the early adopters of a new technology and ”the early majority” (see related posting).  Technology author Geoffrey Moore argues that if products to cross this chasm, they must appeal to an audience that cares little about the technical intricacies and mechanics. The problem in the tech world is that successful suppliers of the early adopters get too hung up with these features and are then unable to satisfy the needs of the broader marketplace. If this model holds, then Calvello’s bundling idea may be just the thing for which the average institutional investor is looking. [...]