Browsing: Allocating to A.I.

Allocating to A.I.

What has private equity done for state pension funds lately?

Jun 14th, 2018 | Filed under: Allocating to A.I., Debt Types of Private Equity, Equity Types of Private Equity, Institutional Asset Management, Newly Added, Private Equity, Private Investments

Los Angeles-based Cliffwater LLC has recently updated a report it prepared a year ago on how state pension systems have fared by way of their investments in private equity. The report as updated finds that PE created on average a 10.7% annualized return across 21 state pensions over its 16-yearRead More


Africa Still Rising (but Patience May Be Required)

Jun 12th, 2018 | Filed under: Emerging Alternative Investments, Emerging markets, High-net-worth investors, Newly Added, Other Topics in A.I., Private Equity, Private Investments, The Global Economy & Currencies

The Emerging Markets Private Equity Association, in a new report, suggests that the “Africa Rising” narrative of a few years ago is behind us. Africa is seen still as having enormous potential. But the report also says, “the commodity downturn of the last several years has had a severe impactRead More


Alternative Uses of the Fixed-Income Markets

Jun 7th, 2018 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Newly Added

Aviva Investors has prepared a research report on absolute return fixed income. The report, called “Building Resilience into Portfolios,” explains that the traditional use of fixed income in a portfolio is quite straightforward. That use generally involves a long position on debt of various sorts (sovereign, corporate, developed or emergingRead More


Eurekahedge on Japan as an Investment Mandate

May 24th, 2018 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Macroeconomics, Newly Added, The Global Economy & Currencies

Eurekahedge has recently concluded its fifth annual survey of asset managers with mandates to invest in Japan. In the words of Eurekahedge chairman and CEO, Satoshi Iwanaga: “Survey results for 2018 suggest that central bank normalization is still a long way off in Japan, with investors continuing to reduce theirRead More


Operating Expenses, Strategies, and Scale

May 15th, 2018 | Filed under: Allocating to A.I., Benchmarking & Performance Attribution, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

Meketa Investment Group has issued a paper on the state of hedge fund operating expenses, the point of which is to offer actual and potential fund investors and their managers alike a benchmarking tool. By definition operating costs are those costs associated with day-to-day operations and the needs of anRead More


Be Fearful When Everyone is Greedy

Apr 5th, 2018 | Filed under: Allocating to A.I., Alternative Investments in Context, Institutional Asset Management, Newly Added, The A.I. Industry

A new report from Context Capital Partners looks into trends in the alternative investments industry, both among institutions and family offices. It finds continued strong demand for alt investments, as well as a rising demand within the alt world for such emerging strategies as cryptocurrency investments and environmental, social, andRead More


Where do chief investment officers come from?

Mar 23rd, 2018 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina Every year there are about 50 to 100 US nonprofit (tax-exempt) and family office CIO searches and that number will climb as more ultra-high-net-worth families (over $100 million AUM) form offices, create foundations, and hire professional investment talent. PwC forecasts a near doubling in global AUM over nineRead More


The Quants, the Algorithms, and the Performance

Mar 18th, 2018 | Filed under: Allocating to A.I., Alpha & Beta, Benchmarking & Performance Attribution, Hedge Funds, Newly Added

A new paper by J.B. Heaton, forthcoming in the Journal of Financial Transformation, offers a skeptical view of the algorithmic trading of securities, its actuality and its potential. Heaton is a lawyer (admitted to the bars of both Illinois and New York) and has a Ph.D. in finance, University ofRead More


Robeco Researcher on Factor Premiums and ETFs

Mar 6th, 2018 | Filed under: Allocating to A.I., ETFs, Liquid Alternative Investiments, Newly Added, Other Topics in A.I., Smart Beta

David Blitz has recently discussed the concern in some quarters that factor premiums may disappear as they are arbitraged away by exchange-traded funds. Blitz, the head of quantitative equity research at Robeco Asset Management, says that such a concern is not justified, because “the exposures of ETFs that may beRead More


Institutional Investors Wary of Passivity

Mar 1st, 2018 | Filed under: Allocating to A.I., Alpha & Beta, Institutional Asset Management, Newly Added, Other Topics in A.I., SRI and Clean Energy

Natixis’ Center for Investor Insight surveyed 500 institutional investors in the fall of 2017 about long-term objectives, short-term opportunities, and the concomitant pressures. In a new paper, Natixis discusses the Center’s take-a-ways from this survey Geopolitical events are the most worrisome prospect on the minds of the decision makers atRead More


DB: Investors Newly Optimistic About Hedge Funds

Feb 22nd, 2018 | Filed under: Allocating to A.I., Asset allocation, Asset Allocation Models, Benchmarking & Performance Attribution, Fees, Hedge Fund Industry Trends, Hedge Funds, Industry Size & Managers, Institutional Asset Management, Institutional Investing, Newly Added, Performance, Analytics & Metrics, Structure of the Hedge Funds Industry, The A.I. Industry

Deustche Bank recently released its Alternative Investment Survey, the 16th annual.  This year the questionnaires received replies from 436 global hedge fund investors, with assets under management of $2.1 trillion, who shared their insights, sentiments, and allocation plans.  Glenn Bunn, co-head of Prime Finance at DB, said in a statementRead More


What Family Offices Want From Alternative Investment Managers

Feb 21st, 2018 | Filed under: Allocating to A.I., Family Offices, High-net-worth investors, Institutional Asset Management, Newly Added

By Diane Harrison Competition within the alternatives sector for family office investments is at an all-time high, as these investors get more comfortable with the range of assets available to them and their general understanding of alternatives rises. Fund managers want to win these wealthy investors over, but often findRead More


Urgent vs. Important: Barriers to Digitization in Alternative Investing

Feb 15th, 2018 | Filed under: Allocating to A.I., Alpha & Beta, Newly Added, Operations, Risk Management & Operations

KPMG International and CREATE-Research have jointly prepared a report about the digitization imperative for alternative investment management. The report includes within that term both hedge funds and private equity. Early on, its authors list eight key digital innovations that are reconstructing the industry: Application programming interfaces; cognitive technology and machineRead More


SSGA on Smart Beta

Feb 8th, 2018 | Filed under: Allocating to A.I., Alpha & Beta, Liquid Alternative Investiments, Liquid Alts, Newly Added, Other Topics in A.I., Smart Beta

State Street Global Advisers has put out a “Complete Guide to Smart Beta.” A preface by Lynn S. Blake explains that the focus of the paper is not on equity products but on “exciting new developments in the fixed income world.” Within that space, multi-factor strategies will proliferate going forward.Read More


Unsophisticated Techniques of Equity Factor Investing Still Prevail

Feb 1st, 2018 | Filed under: Allocating to A.I., Alpha & Beta, Asset allocation, Asset Allocation Models, Institutional Asset Management, Institutional Investing, Newly Added

EDHEC Risk Institute, in collaboration with ERI Scientific Beta, surveyed 114 investment professionals between June and September 2017 about their motivation and interests with regard to equity factor strategies. It found that many, especially on the asset owners’ side of things, were strikingly distant from the state-of-the-art in analytical approachesRead More


Sovereign Wealth Funds, UN Goals, and Hedge Fund Fees

Jan 30th, 2018 | Filed under: Allocating to A.I., Fees, Hedge Funds, Institutional Asset Management, Institutional Investing, Newly Added, Structure of the Hedge Funds Industry

Dr. Rajiv Sharma has written an extensive literature review of “sovereign wealth funds’ investment in sustainable development sectors” for the UN sponsored high-level conference on Financing for Development. Sharma is research director, global projects center, at Stanford University. He writes in this review that there are “a number of issuesRead More


The Rationality (or Otherwise) of Public Pension Fund Managers

Jan 28th, 2018 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Newly Added, The A.I. Industry

A new research paper from the Stanford University Graduate School of Business discusses the rationality (or otherwise) of the return expectations of institutional investors, with especial reference to public pension funds. It finds that the returns that pension fund managers expect from their investments are extrapolated from the returns thoseRead More


KPMG’s Report Cards on Real Assets

Jan 23rd, 2018 | Filed under: Infrastructure, Institutional Asset Management, Institutional Investing, Liquid and Fixed Income Real Estate, Natural Resources and Land, Newly Added, Operationally Intensive Real Assets, Real Assets, Real Estate, Real Estate Equity Investments

KPMG has posted a new paper looking at the role of real assets (defined as “anything where there is a tangible/physical asset being traded”) within a portfolio, with a focus on opportunities for U.K. based institutional investors, especially pension schemes. It begins with a brief survey of the field. RealRead More


Searching for the Right Infrastructure Manager: 3 Case Studies

Jan 14th, 2018 | Filed under: Allocating to A.I., Infrastructure, Institutional Asset Management, Institutional Investing, Newly Added, Operationally Intensive Real Assets, Real Assets

A new paper from bfinance (an independent financial services consultancy headquartered in London) discusses the “dramatically different era” into which infrastructure investing has entered over the last two years. The paper, “DNA of a Manager Search: Infrastructure,” looks at three recent unlisted infrastructure searches, in order to glean some insightRead More


Global Macro: Valuable for Institutional Portfolios

Jan 7th, 2018 | Filed under: Allocating to A.I., Asset allocation, Asset Allocation Models, Hedge Fund Strategies, Hedge Funds, Institutional Asset Management, Institutional Investing, Macro and Managed Futures Funds, Newly Added

The Mekata Investment Group has published a white paper on global macro hedge funds, contending that a position in such a fund is a valuable defensive tool for an institution. Global Macros are valuable because they perform best during turbulent or volatile markets, which is when defense is most needed,Read More


Top Hedge Fund Industry Trends for 2018

Jan 3rd, 2018 | Filed under: Hedge Fund Industry Trends, Hedge Funds, Institutional Asset Management, Institutional Investing, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

By Don Steinbrugge Each year, Agecroft Partners predicts the top hedge fund industry trends stemming from our contact with more than two thousand institutional investors and hundreds of hedge fund organizations. The hedge fund industry is dynamic, and participants are best served by anticipating, rather than reacting to, change. Below areRead More


Hedge Funds: Myths and Pendulums

Dec 27th, 2017 | Filed under: Allocating to A.I., Hedge Funds, Institutional Asset Management, Institutional Investing, Newly Added, The A.I. Industry

Steben & Co., a Gaithersburg, Maryland headquartered fund of fund manager, has issued a white paper on the various unfavorable myths that it contends surround the hedge fund market. It says that four different myths are discouraging investments, and indeed that they are promulgated precisely for that purpose. The myths:Read More


Rukaiyah Adams, CIO Meyer Memorial Trust – doing good and investing well

Dec 26th, 2017 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added, Personalities in AI, Practitioners, Who's Who

By Charles Skorina The $90 billion Oregon Pension ranks among the top 15 in the US, but how many in the industry know the current board chair, Ms. Rukaiyah Adams? Ms. Adams was born in Berkeley, CA, grew up in diverse, northeast Portland, and returned to her home city afterRead More


Institutional Investors Expect More Vol, Higher Interest Rates: But They Fear Not

Dec 17th, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Alternative Investments in Context, Consultants, Institutional Asset Management, Institutional Investing, Newly Added, The A.I. Industry

Natixis Investment Managers has released survey data on the mood of institutional investors around the world. Natixis, which has $961 billion in assets under management, polled the decision makers of 500 institutions that together represent more than $19 trillion of assets. Among the takeaways: investors expect more volatility, in bothRead More


State Street Forecasts on Smart Beta

Dec 12th, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Finance & Economics, Institutional Asset Management, Institutional Investing, Liquid Alternative Investiments, Newly Added, Other Topics in A.I., Smart Beta

State Street Global Advisors has a new paper out that seeks to help State Street clients “refine their own strategic asset allocation” especially insofar as their portfolios include smart beta investments, by explaining how State Street forecasts returns, and where the forecasts as to some of the factor returns standRead More


University endowments in the crosshairs

Dec 11th, 2017 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina The U.S. has the greatest university system in the world.  But it’s expensive.  And congress is about to make matters worse by taxing the endowment earnings of “large” private college and university endowments. The latest congressional proposal aims to slap a 1.4 percent excise tax on theRead More


A look at the European pension industry

Nov 28th, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Institutional Asset Management, Institutional Investing, Newly Added

Three years ago, Amin Rajan, the CEO of CREATE-Research, prepared a study of the way that pension plans had reacted to the global financial crisis and to the subsequent financial conditions.  His study continues to be worthy of attention in 2017. The study included a survey of 190 pension plansRead More


Exley on Cashflow-Driven Investment

Nov 26th, 2017 | Filed under: Asset allocation, Asset Allocation Models, Institutional Asset Management, Liability Driven Investing, Newly Added

A new paper by Jon Exley, solutions manager of Schroders, discusses cashflow-driven investment (CDI) as a system of portfolio management that accepts and builds upon liability-driven investment (LDI). The idea in both cases is to match all future projected liability payments as they fall due, which is definitionally the imperativeRead More


Interest Rates and Hedge Fund Returns

Nov 23rd, 2017 | Filed under: Allocating to A.I., Fees, Hedge Fund Industry Trends, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

A paper put out in October by an Associate Director and a Managing Director at Pavilion Alternatives Group says that hedge fund performance can suffer from a performance fee drag as a consequence of rising interest rates, and from the increasing cash rate that comes with that rise.  They explainRead More


Advice to Hedge Fund Managers on Attracting, Retaining Investors

Nov 19th, 2017 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Funds, Institutional Asset Management, Institutional Investing, Newly Added, Structure of the Hedge Funds Industry

Ernst & Young has released a new survey on how hedge fund managers may “embrace innovation to illuminate competitive advantages,” that is, to attract and retain investors and their assets. Manager may need such advice, because the investors surveyed said they are more likely to decrease allocations to hedge fundsRead More


Adding Some Contrarianism to the Momentum Strategy

Nov 12th, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Hedge Funds, Newly Added

A scholar in Moscow, at National Research University Higher School of Economics, has proposed a trading strategy that combines ‘momentum’ and “contrarian’ strategies in a way that, this scholar believes, could reap the upsides of both. The scholar, Victoria Dobrynskaya, assistant professor of finance, says that momentum strategies do produceRead More


Endowment costs: The secret history

Nov 6th, 2017 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina In early 2016 certain Congressional committees sent letters to 65 major private universities asking for information about their endowments.  They supposedly had an urgent need for this data and gave the schools just 30 days to respond. It was worded as a polite request, but it cameRead More


EIU on Institutions and Time Horizons

Oct 19th, 2017 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Newly Added, Risk management, Risk Management Strategies & Processes

With the  sponsorship of Franklin Templeton, The Economist Intelligence Unit (EIU)  has surveyed  143 investing institutions in North America (part of the global sample of 571) in order to study recent shifts in their portfolio allocation, especially with an eye to the risks that concern them and the length ofRead More


Outsourced assets under management up 18% year-over-year

Oct 18th, 2017 | Filed under: Consultants, Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina With 76 firms heard from, we’re now reporting $1.62 trillion in full-discretion assets under management by outsourced chief investment officer firms. That’s a year-over-year jump of $292 billion – or 18 percent – since September, 2016. The number of reported RFPs is also rising as institutions seek better returnsRead More


The State of Alternative Investments in Australia and New Zealand 

Oct 8th, 2017 | Filed under: Institutional Asset Management, Institutional Investing, Newly Added, The A.I. Industry

A new Preqin paper presents the state of the alternatives investment industry in Australia and New Zealand. Mark O’Hare, the CEO of Preqin, says in a Foreword that Preqin’s databases track 481 fund managers active in one or the other of those two countries, and 443 “significant institutional investors” TheRead More


Alternative Investments in Target Date Funds

Oct 3rd, 2017 | Filed under: Alternative Investments in Context, Asset allocation, Asset Allocation Models, Newly Added, The A.I. Industry

Vanguard, the manager of about 370 low cost traditional funds and ETFs, and an institution famously associated with low cost retail investing, has made public a new paper on the inclusion of alternative investments in target date funds. It isn’t enamored of the idea. Target date funds (TDFs), otherwise knownRead More


The Function of the High-Watermark: Not What You Think

Oct 1st, 2017 | Filed under: Newly Added, Performance, Analytics & Metrics, The A.I. Industry

A new paper in the Journal of Accounting and Finance discusses hurdle rates and high watermarks, and how they affect, or at least correlate with, performance. A hurdle rate is a minimum contractually specified rate of return that a hedge fund must achieve in order to collect performance fees. ARead More


AIMA and SGPS on Managed Futures and CTAs

Sep 28th, 2017 | Filed under: Algorithmic and high-frequency trading, Allocating to A.I., Business News, Commodities, CTA, Institutional Asset Management, Investing in Commodities, Macro and Managed Futures Funds, Newly Added, The A.I. Industry

The Alternative Investment Management Association and Societe Generale Prime Services have together put out a white paper about managed futures funds and the commodity trading advisers who manage them. A key themes of the paper is that managed futures strategies aren’t as risky as are typical investments in equity markets.Read More


Aon: Alternative Risk Premia Viable for Many

Sep 17th, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Asset Allocation Models, Finance & Economics, Financial Economics Theory, Newly Added

A new report from Aon discusses the contemporary market for alternative risk premia: where it is, how it got here; where it may be headed. The authors, Matthew Towsey and Chris Walvoord, begin with some very basic considerations of what ‘risk premia’ are. They are, on the one hand, theRead More


Paying the Top Guns of Institutional Investing

Sep 11th, 2017 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added, Personalities in AI

By Charles Skorina Last month in Part One of this report we focused on relative performance.  We ranked 107 CIOs by trailing 5-year returns. Now, we focus on how much institutions pay these excellent people. The bare comp numbers lead us to the tricky and perennial question of whether their payRead More


Wide Range of Investors Has Wide Range of Opinions on their Managers

Sep 10th, 2017 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Newly Added, The A.I. Industry

Intralinks, in partnership with Global Fund Media, has surveyed the opinions of limited partners: they’ve been asking LPs what they think about their GPs/managers in the alternative investment context. The bottom line of the survey is that LPs are looking in the near future to increase their allocations in alternatives.Read More


Sovereign Wealth Funds: Partners and Capability

Sep 7th, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Institutional Asset Management, Institutional Investing, Newly Added

Sometimes it pays to read footnotes and end matter, because that turns out to be where the story is. Bocconi University’s Sovereign Investment Lab has published its latest annual report on sovereign wealth funds, and this gives us a case in point. The report says that 2016 was far fromRead More


NEPC Surveys E&F Managers About Alternative Investments

Aug 27th, 2017 | Filed under: Allocating to A.I., Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added, The A.I. Industry

NEPC, the investment consulting group that caters especially to endowments and foundations, has posted a survey about what such institutions think of marketable alternatives. This broad category “marketable alternatives” includes direct hedge funds, funds of hedge funds, liquid alternatives, and global asset allocation. Eighty-seven percent of the E&F respondents inRead More


Build Value: Don’t Just Meet Quarterly Targets!

Aug 15th, 2017 | Filed under: Allocating to A.I., Alternative Investments in Context, Institutional Asset Management, Newly Added, The A.I. Industry

FCLT Global, a new not-for-profit organization that seeks to promote long-term thinking in business and finance, has issued a manifesto, “Rising to the Challenge of Short-Termism.” The paper was written by Dominic Barton, Jonathan Bailer, and Joshua Zoffer. Each is affiliated with McKinsey & Company, which is one of theRead More


Boston College’s CRR on Alternatives in Pension Portfolios

Aug 13th, 2017 | Filed under: Asset Allocation Models, Institutional Asset Management, Newly Added, The A.I. Industry

The Center for Retirement Research at Boston College has put out a white paper about public pensions and alternative investments.  It asks two questions: which plans have made the largest shift into alternatives? And, how has that shift mattered to their returns and risk? The report begins with the observationRead More


A Simple Approach to the Management of Endowments

Aug 7th, 2017 | Filed under: Allocating to A.I., Asset allocation, Asset Allocation Models, Endowments & Foundations, Institutional Asset Management, Newly Added

By Hossein Kazemi & Kathryn Wilkens, CAIA Endowments and foundations are tax exempt and charitable organizations that rely on permanent pools of capital to fund their activities. These pools of capital are owned by institutions such as colleges, universities, hospitals, museums, scientific organizations, charitable entities, and religious institutions. When well-fundedRead More


Lessons from University Endowments

Jul 23rd, 2017 | Filed under: Allocating to A.I., Asset allocation, Asset Allocation Models, Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

In a recent article for The Journal of Investment Consulting, John Mulvey and Margaret Holen look at the practice of asset allocation among large U.S. university endowments. They focus on asset category definitions in the hope of throwing some light on “the movement to define asset categories with reference toRead More


Preqin and NXT Capital on the Filling of a Post-GFC Vacuum

Jul 20th, 2017 | Filed under: Allocating to A.I., Institutional Asset Management, Newly Added

Preqin, in collaboration with NXT Capital, has surveyed institutional investors about the U.S. lower middle-market direct lending space, and has issued a report on their attitudes. The gist of the report is that investor appetite for the lower middle market “has steadily gained momentum in the past decade and …Read More


The 100+ Top Guns of Institutional Investing

Jul 12th, 2017 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added, Personalities in AI, Who's Who

By Charles Skorina This letter looks at the most recent five-year performance of over one hundred of the world’s best institutional investors. Endowment chief investment officers have an infinite investment horizon, a global playing field, and can invest in anything anywhere – within the broad policy limits set by theirRead More


Pensions: On Mortality and Long-Duration Corporate Bonds

Jul 11th, 2017 | Filed under: Allocating to A.I., Asset allocation, Asset Allocation Models, Newly Added

Milliman, an actuarial and consulting firm headquartered in Seattle, has completed a white paper on corporate pension funding based on its 17th annual analysis of the disclosures of the “Milliman 100,” that is, of the 100 biggest corporate defined benefit plan sponsors in the U.S. The funded ratio of theseRead More