Browsing: Alternative Investments in Context

One of the most well-worn clichés in the hedge fund industry is the phrase “skin in the game.” Investors want managers who have “skin in the game,” that is, managers who risk/hedge their own money the same way they are risking/investing their outside investors’ money. A recent paper by ArpitRead More

A recent (May 2017) Deloitte white paper discussed asset management in Italy. The paper begins with the observation that key institutions in Italian finance have a relatively short history: going no further back than the mists of the 1990s. The Società di Intermediazione Mobiliare (SIM) – literally, the phrase meansRead More

A new CFA Institute report, working from a survey of 1,145 leaders in the contemporary global investment industry, discusses the mega-trends at work, including: technological advance, shifting client preferences, new macroeconomic conditions, changing regulatory regimes amidst geopolitical novelties, and new demographics. The report, entitled “Future State of the Investment Profession:Read More

Two scholars affiliated with Singapore Management University have published a study of “the pitfalls of going public,” that is, of what can happen when the management of a hedge fund becomes a publicly owned company. They conclude that the going-public process itself breaks the alignment of incentives between managers andRead More

McKinsey & Co. has posted a new report assessing the state and the future of the North American asset management industry, encompassing both active and passive managers and looking at five mega-trends. Skipping to the chase, the trends are these: The end of an anomalous eta of “exceptional investment returns.”Read More

RCM Alternatives, a Chicago-based asset manager specializing in managed futures products, has published a new white paper asking the naive-seeming question, “Why Alternatives?” The paper begins with the observation that many alternative investors look to this field for an answer to a specific problem:  hedging the long position in equitiesRead More

In October 2015, a scholar at the University of Toronto wrote a paper on what he called the “paranoid style of investment lawyers and arbitrators,” bemoaning an increasingly shrill and belligerent tone in the investment world of late. If there is such paranoia, one probable contributor, and one possible consequenceRead More

Two indexes of confidence, one for millionaires, the other for not-quite millionaires, have returned to the level at which they stood in June of this year, after a summer rise and autumnal fall. A discussion of the arc. Read More

Though the recovery is showing signs of its age and weakness, this is still not the day for which tail-risk funds were designed, the moment of 'extreme distress' and victorious black swans. Thank heavens for that fact, and thank Eurekahedge for the news. Read More

It's that time of year when investment advisers are talking about asset allocation. Guest columnist Diane Harrison explains why you should never give up on your alternative investments.Read More

Not even Schrodinger blamed the reporters for market irrationality. Saying out loud, "Hey, this cat is dead," doesn't kill the cat. Read More

Guest columnist Don Steinbrugge on why hedge fund AUM is set for an increase over the course of the next 12 months.Read More

Larry Fink is "deeply worried" that the combination of share repo with high-yield debt is "one of the reasons why we have a below trend-line economy. We're not investing in the future as much as we should." Carl Icahn, predictably, has a very different view of what ails us. Read More

Trafigura has done quite well from the decline in crude oil prices in recent months. So well, in fact, as to throw a harsh light on a story that appeared in The New York Times in December 2013. Read More

Much of the ubiquitous talk of the short-sightedness of nasty activist investors or traders is simply confused, analytically sloppy. It is a sort of confusion likely to have negative consequences to the extent that investors/traders themselves come to take it seriously. Read More

Faille is struck by a brief passage in the recent Nortel decision (the Delaware side of the Delaware/Ontario concord over allocation) that suggests the degree to which the United States dominates the patent-granting as well as the patent-litigating world. Like what the U.K. is for defamation.... Read More

The tear-jerker ending to a famous Broadway musical comes to Faille's mind as he contemplates the latest twist in the struggle over DuPont's board. Read More

Guest columnist Donald Steinbrugge, CFA, looks at the bad rap hedge funds have gotten and talks about why it's not deserved.Read More

The success of Wynn's lawsuit would have chilled free speech by short sellers. So let us take a moment to celebrate its quick demise at the hands of Judge Orrick. As a general rule, though, when a plaintiff quotes an expression from a transcript that, in fact, is immediately preceded by the word "not," and the plaintiff leaves the "not" out of the quote ... things are knotty. Read More

The story on the front page of The Wall Street Journal, about the Dendreon/Provenge investigations, focuses on trading in Dendreon stock over a three week period, beginning with the date of an e-mail sent out on June 7th, 2010. Read More

The great thing about short sellers has always been that -- if they're good -- it's because they have a keen nose that can smell a boiler room. If they are open about what they're doing, they can also serve as a valuable red light for others in connection with overblown enthusiasms. Don't be the bag holder. Read More

Guest columnist Don Steinbrugge looks at why allocators continue to invest in hedge funds, even when the media thinks they shouldn't.Read More

Facile parallels notwithstanding, neither the argument Druckenmiller made at Sohn nor any other good reasons that may now exist for shorting the Aussie have a lot to do with the case against the pound in 1992. That tug-of-war occurred in a unique context, not here replicated. Read More

One take-away from David Stockman's new best selling book is that the phrase "hedge fund" may well be on its way beyond descriptive significance. In the public realm, a "hedge fund" is now as much a metaphor as is a "Trojan horse." It is becoming a metaphor for any institution's failure to hedge. Read More

“It was quite convenient to blame the Hedge Funds. They were an easy target, in that they were super-rich, a lot of them were American, and they were presented as bad people. They were blamed for what was happening to our banking system, which in reality was complete rubbish.”--Kate Walsh, Sunday Times, 2010.Read More

One of the long-term trends that the hedge fund industry, and many others, face is the fact that the new media have unpredictable and sometimes unsettling consequences for many ways of doing business, including ways of finding alpha. The case of Barclays v. Fly on the Wall illustrates some of those consequences.Read More

"Bernie" is back in the headlines, squawking from the jailhouse about how the banks and others should have seen his scheme for what it was - and actually may have. The broader question is whether suspicions about Madoff's bogus strategy would have made a difference.Read More

Hedge funds and the mass media have always had a love/hate relationship (with emphasis on the "hate" part). But it turns out that an analysis of media word choices - and the choices of words in funds' own press releases - may contain valuable information. Read More

A new report on the challenges faced by the hedge fund industry reveals some somewhat positive news: that hedge funds weren't the renegade, levered up, ready-to-destroy-the-global-financial-markets types that many believed.Read More

The administrator in charge of distributing the frozen assets of Lehman Brothers Holdings Inc. announced last week that it had struck a deal to return some $11 billion to creditors. But how exactly are those assets being valued?Read More

Earlier this week a widely-read columnist provided a wonderful example of the challenges faced by those who wish to ban hedge funds - a lack of hard data.Read More

Were Credit Default Swaps of symptom or a cause of AIG's downfall? Was AIG really a "hedge fund"? These questions and more are addressed in a new paper by the traffic cop in the "intersection of law and finance". Read More

The so-called "D-Day" is here once again. With about 45 days left until the end of Q1, market watchers turn an eye toward hedge fund redemptions as a possible explanation for all that ails markets.Read More

When we read some hedge fund headlines, we are forced to ask ourselves a critical question: WTF? (that's "Whither the facts...") Read More

Now everyone from pensions to governments to legitimate hedge funds are in the Ponzi game. Given this, we guess it shouldn't be that hard for the SEC to rack-up the score. Read More

Barton Biggs says the hedge fund industry isn't coming to an end after all. What if he's right?Read More

Back in the old days (like, in August), shutting a "redemption gate" used to be a form of punishment. Now it's more like "tough love". Read More

What faces the asset management after the dust settles? Hopefully, a sober and renewed examination of alpha across all investments - not a renunciation of it. Read More

There's no question that it's rough seas ahead for hedge funds. But the industry will weather this storm better than many think.Read More

The acquisition of Reuters by Thomson sounded the death knell last week for one of the industry's first online portals. Read More

Politicians have been doing it for years. But now journalists have begun to switch teams - joining the very hedge funds on which they used to report. Read More

What's the difference between the hedge fund industry and Tom Hanks' character in the movie "Castaway"? Only one is clinging to hope.Read More

A popular columnist says hedge funds might be the "next shoe to drop" as a result of the credit crunch - prompting one chapter of AIMA to speak out. Read More

Canada’s National Post reports that the FBI is now warning of hedge fund fraud (“FBI Warns of Hedge Fund Fraud“).  But in actuality, FBI Director Robert Meuller gave a 2,000 word speech last week in which “hedge fund” appeared only once – after a lengthy discussion corporate fraud, public corruption,Read More

A widely-syndicated column about the 130/30 "fad" misses the mark and sets the stage for years of public confusion regarding short-extension strategies.Read More

There is little debate that top hedge fund managers make astronomical amounts of money. But are such amounts actually that new? If not, why are they an issue now?Read More

The closest thing hedge fund managers have to a global trade association is apparently fed up with reading how its members are at the root of all that is evil.Read More

It's deja vu all over again this month as one early-reporting database pronounces that hedge fund assets - at least in one category - shrank last month.Read More