Browsing: Structure of the Hedge Funds Industry

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Structure of the Hedge Funds Industry

Credit Suisse Finds that Institutions Remain Committed to Hedge Funds

Apr 11th, 2017 | Filed under: Allocating to A.I., Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

A new Credit Suisse report about hedge fund investors’ appetites, titled “shifting tides,” comes to the somewhat re-assuring conclusion that, in some respects at least, the shift isn’t what one might fear. The report begins with the simple observation that 2016, a year that began with unexpected swings in manyRead More


The Low Volatility Anomaly: Gunpowder Inc.

Feb 26th, 2017 | Filed under: CAPM / Alpha Theory, Finance & Economics, Financial Economics Theory, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

In a new paper David Blitz, the head of quantitative strategies for Robeco Asset Management, crunches numbers and reaches a surprising conclusion, precisely contrary to an intuitively appealing theory about the low volatility anomaly.  But … let’s begin from the beginning. Standard financial economic theory holds that investors are compensatedRead More


Hedge Fund Managerial Talent: From Quality to Quantity

Feb 20th, 2017 | Filed under: Hedge Fund Industry Trends, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

A new report that comes to us jointly from EY and the AIMA indicates that hedge fund industry leaders believe that one of the secrets to success in the field is investment in, and thus retention of, talent. When the report was released, Dan Thompson, partner in the EY financialRead More


BLEAK HOUSE–OR THE OUTLOOK ON HEDGE FUNDS NOW

Oct 19th, 2016 | Filed under: Allocating to A.I., Endowments & Foundations, Family Offices, Hedge Fund Industry Trends, Hedge Funds, High-net-worth investors, Institutional Asset Management, Institutional Investing, Investor Relations, Newly Added, Sales & Marketing in the AI Industry

By Diane Harrison Charles Dickens’ Bleak House spins a tale of mystery, intrigue, family dynamics, and irony in the Victorian age that had readers gripped by its indictment of the English court system. While the novel is packed with intricate plot twists and turns, the main story line centers onRead More


Aligning Interests: Changes in Alt Investment Business Models

Sep 18th, 2016 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Funds, Industry Size & Managers, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

A new AIMA research paper discusses “the alignment of interests between hedge fund managers and investors” as it manifests itself in changes in the hedge fund business model. There have always been features in the relationship that were designed to produce such an alignment. As Michelle McGregor Smith observes, inRead More


5 Reasons Why Emerging Managers are Worth a Look

Aug 8th, 2016 | Filed under: Industry Size & Managers, Newly Added, Sales & Marketing in the AI Industry, Seeding/early-stage, Structure of the Hedge Funds Industry, The A.I. Industry

By Diane Harrison Beware the industry naysayers who proclaim hedge funds aren’t worth their salt–fees/risk/terms/etc. Sweeping generalizations may make good headlines, but they are invariably proven false by the minority that refutes them through action/statements/results/etc. Investors who take the time and effort to look under the ‘hedge fund hood’ canRead More


Headline vs. Core Inflation: We Shouldn’t Have Laughed

Aug 4th, 2016 | Filed under: Commodities, Hedge Funds, Investing in Commodities, Newly Added, Structure of the Hedge Funds Industry

I’m old enough to remember the 1970s, and to remember the economic debates in the United States at the time concerning the inflation of that era. The U.S. left the Bretton Woods system near the start of the decade, thus ushering the “free float” of currencies against one another inRead More


Managing Expectations: The Rise of the Separately Managed Account

Jul 11th, 2016 | Filed under: Family Offices, Hedge Fund Industry Trends, High-net-worth investors, Newly Added, Sales & Marketing in the AI Industry, Structure of the Hedge Funds Industry

By Diane Harrison The line between wealth management and fund management continues to blur for the alternative asset managers who serve the high-net-worth investor community. Driven by a growing desire on the part of these investors to maximize control over their investment portfolio, managers who are emerging or who operateRead More


The hedge fund fee structure consumes 80% of alpha

Jun 20th, 2016 | Filed under: Fees, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

By Andrew Beer Investors bear the risks and managers reap the rewards. The average hedge fund earns 1.67 per cent in management fees and is paid 18 per cent of investment profits annually. Over the past ten years, investors paid away half of pre-fee returns. Even more troubling is theRead More


Hedge Funds are Still Relevant in a Diversified Portfolio: 4 Fundamental Criteria for Superior Manager Selection

May 25th, 2016 | Filed under: Asset allocation, Asset Allocation Models, Hedge Fund Industry Trends, Hedge Fund Strategies, Hedge Funds, Newly Added

By Appomattox Advisory, Inc. The discussion has revived again:  are hedge funds still relevant in a diversified portfolio? We believe that a thoughtful allocation to hedge funds continues to be an impactful, prudent and profitable strategy for institutional portfolios. For allocators seeking to achieve stable returns in a difficult investing environment,Read More


Tricky Times for Hedge Funds and a Lot of Negative YTD Performances

May 22nd, 2016 | Filed under: Benchmarking & Performance Attribution, Equity Hedge Funds, Fees, Hedge Fund Strategies, Hedge Funds, Indexes, Newly Added, Performance, Analytics & Metrics, Structure of the Hedge Funds Industry

A slim majority of hedge fund managers are in the red year to date, through April, according to the latest report from Eurekahedge. Specifically, 51.4% of managers have negative YTD performance. Over the same period in 2015, the analogous number was only 21.2%. That is a good indication of whatRead More


March Improved, but 2016 Still Rains Red for Hedge Funds

Apr 24th, 2016 | Filed under: Allocating to A.I., Alpha & Beta, Benchmarking & Performance Attribution, Equity Hedge Funds, Hedge Fund Industry Trends, Hedge Fund Strategies, Hedge Funds, Newly Added

The latest report from Eurekahedge indicates that hedge funds worldwide gained in March, though by far less than the underlying markets gained during the same period. Specifically, the Eurekahedge Hedge Fund Index gained 1.33 percent over the month, while the MSCI World Index, representing those underlying markets, gained 5.47 percent.Read More


The Value of a Proxy Access Mandate: Part Two

Apr 19th, 2016 | Filed under: CAPM / Alpha Theory, Finance & Economics, Financial Economics Theory, Hedge Fund Industry Trends, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

This is the conclusion of a two-part series on the issue of the value of a proxy access mandate. In the first part we looked specifically at a study the CFA Institute made public two years ago, one that has of late received renewed attention. It relied upon four scholarlyRead More


The Value of a Proxy Access Mandate: Part One

Apr 17th, 2016 | Filed under: CAPM / Alpha Theory, Finance & Economics, Hedge Fund Industry Trends, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

This begins a two-part discussion of the issue of the value of a proxy access mandate. The question is an important one. It is prima facie wrong to create any new rule (whether it’s a corporate bylaw, a regulatory edict, an act of a legislature or anything else) unless thereRead More


An Edge that Everyone Else Has Figured Out Already

Apr 14th, 2016 | Filed under: Hedge Fund Industry Trends, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

Tiburon Capital Management has posted a paper about crowded trades and the resulting ‘avoid’ lists: that is, about those bright alpha-pursuant ideas that everybody else has figured out already, and that accordingly are bound to underperform. The paper (in its first footnote) tells an oft-told joke. It’ll be told againRead More


Data Exploitation for Asset Managers: A Survey and White Paper

Apr 12th, 2016 | Filed under: Hedge Funds, Newly Added, Risk Management Strategies & Processes, Structure of the Hedge Funds Industry

A new survey sponsored by Northern Trust suggests that asset managers need to capture more value from available data, and that in order to do so they need both a more flexible strategy and stronger leadership than many now have. The surveyors talked to more than 200 executives in insuranceRead More


Coming Up Short in 2016

Mar 14th, 2016 | Filed under: Hedge Fund Industry Trends, Newly Added

January’s wild ride set the tone for a jittery year in market performance. While the first quarter of 2016 has managed thus far to recover from its precipitous initial swoon, investors aren’t feeling comfortable with the current state of affairs.  Fed policy regarding interest rate direction, a strong dollar, andRead More


Convergence: Hedge Fund Managers Will Need More Staff

Mar 1st, 2016 | Filed under: Asset Managers, Hedge Fund Industry Trends, Hedge Funds, Industry Size & Managers, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

Convergence, a research and advisory firm serving the alternative asset management world, has posted a review of the year 2015, looking at where the industry stands by comparing 2015 and 2014 numbers in a number of respects.Read More


Alternatives Appetite 2016: Bulk Up or Slim Down?

Feb 8th, 2016 | Filed under: Hedge Fund Industry Trends, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

By Diane Harrison January started the year off with a bang, as global markets were rocked by Fed tightening, China crumbling, and lots of political mumbling. Prices swooned across the board and spooked investors, who strained to make sense of a financial foundation that seems to be built on sand.Read More


Alternative Multi-Manager Mutual Funds: What’s the Value Proposition, Again?

Jan 25th, 2016 | Filed under: Alternative Mutual Funds, Fees, Hedge Fund Industry Trends, Liquid Alternative Investiments, Liquid Alts, Newly Added, Other Topics in A.I., Retail Investing, Structure of the Hedge Funds Industry

By Andrew Beer New products are sold on a story.  For alternative multi-manager mutual funds – most of which have launched since 2012 – the pitch goes something like this:  we can find top tier hedge fund managers to run various alternative investment strategies – equity long/short, relative value, macro,Read More


Banks (PBs): Turning Cash Away

Jan 21st, 2016 | Filed under: Hedge Fund Regulation, Hedge Funds, Newly Added, Regulatory Environment, Structure of the Hedge Funds Industry, The A.I. Industry

The Alternative Investment Management Association and S3 Partners jointly sponsored a new survey and report on the consequences of the Basel III reforms on the alternative-investment world. Basel III, a voluntary set of banking-supervisory standards for capital adequacy, stress testing, and market liquidity, published in its final form by theRead More


Top Alpha Stories of 2015: Nerds Win Three, Lose Two

Dec 29th, 2015 | Filed under: Commodities, Industry Size & Managers, Investing in Commodities, Newly Added, Regulatory, Regulatory Environment, Structure of the Hedge Funds Industry, The A.I. Industry

We offer our annual review of the five top Alpha stories of the year ending, in the course of which we mention that these are exciting times in the world of basic biological/medical research. They’ve been exciting at least since the completion of the map of the human genome in 2003, when attention turned to what can be done with that map. Read More


AIMA: From Cola Wars to Clusters to Clusters-of-Clusters

Nov 22nd, 2015 | Filed under: Equity Hedge Funds, Hedge Fund Industry Trends, Hedge Funds, Newly Added

Equity neutral funds go far beyond simple pairs trades. Still, for reasons that a simple pairs-trading example can illustrate, equity market neutral funds, a recent paper says, have “demonstrated their resilience over the past 20 years, posting steady long-term risk-adjusted returns.” Read More


How Start-ups Are Influencing Alternative Assets (Video)

Oct 28th, 2015 | Filed under: Seeding/early-stage, Structure of the Hedge Funds Industry

From hedge fund start-ups on the rise to investments moving to private equity and manager compensation, it's all on the table in today's video.Read More


KPMG and Beschloss on Alternatives, Interest Rates and Women

Oct 4th, 2015 | Filed under: Structure of the Hedge Funds Industry

Investors may well add to their alternatives portfolio allocations in the months to come. What will this mean for small and medium sized hedge funds, many woman-headed funds among them? Read More


Blame China; Blame the US Fed, whatever … August Hedge Fund Numbers Stunk

Sep 21st, 2015 | Filed under: Structure of the Hedge Funds Industry, The Global Economy & Currencies

Eurekahedge's latest round-up of hedge fund results by strategy and region makes quantitative what you, dear reader, probably knew: August was bad. The report also includes some discussion of HK/Shanghai arbitrage. Read More


Japan: Richardson makes a Tricky Case

Sep 9th, 2015 | Filed under: Currencies, Forex, Indexes, Institutional Investing

The Japanese economy deserves some credit for having pulled itself out of a recent recession, and it is "beginning to show signs of benefiting from a weaker yen" as a BlackRock strategist tells us. But (there is always a "but"). Read More


Foundations: They’ve Taken a Blow from “Subdued” Markets

Sep 2nd, 2015 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Indexes, Institutional Investing, Liquid Alts, Performance, Analytics & Metrics, Risk management

Both private and community foundations depend heavily on U.S. equities. Indeed, domestic equities remained the bright spot while other strategies underperformed in 2014. A new report from a collaboration of the Council on Foundations and Commonfund provides food for thought about the reversal in foundation returns in that year. TheRead More


What Taper Tantrum?  And, Will Yellen Pull a Bernanke?

Aug 30th, 2015 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Indexes, Macroeconomics

The head of the New York Fed said on Wednesday, August 26th, that "the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago." We may be about to see another Fed retreat, analogous to that of a little more than two years ago. Read More


CFTC Exempts ASX Clear from DCO Registration

Aug 25th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Commodities, Hedge Fund Industry Trends

The CFTC has issued its first exemption from the CDO registration mandate under 5b (h). The successful petition for that exemption, from ASX Clear, has the additional merit of having inspired an idiosyncratic seeming, but concise, comment letter, quoted in full here. Read More


Weintraub of GFT: Basel III Coming Into Force by Increments

Aug 20th, 2015 | Filed under: Asset allocation, Hedge Fund Industry Trends, Regulatory, Risk management

Faille spoke recently to Herman Weintraub, executive director and head of alternative investment practices at GFT, about the impact of the Basel III rule changes upon the HF industry. Weintraub says, one ought to look not at the parts, but at the whole. Read More


Hedge Fund Assets to Increase a Quarter Trillion Dollars by Summer of 2016

Aug 19th, 2015 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Media Coverage of Hedge Funds

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


Event-Driven Hedge Funds Rescued by Obamacare

Aug 11th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing

Obamacare's impact on the investment world may have been mitigated until very recently by the protracted and complicated litigation that the law immediately generated starting with its enactment in 2010. But now.... Read More


MMIF Reporting: An Ongoing Challenge for Fund Administrators

Aug 5th, 2015 | Filed under: Due Diligence Process, Hedge Fund Industry Trends, Hedge Fund Regulation, UCITs

Guest columnist Shane Brett discusses a new RR Donnelley survey on the MMIF challenges facing fund administrators.Read More


The Strength of Multi-Strat Is No Mystery

Aug 2nd, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Fees, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing

Credit Suisse Capital Services says that appetite has increased of late, among institutional investors, for multistrategy funds. Faille offers some thoughts as to why. Read More


Crisis? Tempted to Flee to Shelter of Big Funds? Bad Idea

Jul 29th, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Behavioral finance, CAPM / Alpha Theory, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing

The authors of a new study of the relationship between fund size and performance employ a database consisting of 7,261 funds and their performance over a twenty year period (1994 to 2014). Spoiler alert: size is bad. Especially in a crisis.Read More


Alternative Investments By the Numbers: Top 5 2015 YTD Takeaways

Jul 23rd, 2015 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Liquid Alts, Performance, Analytics & Metrics, Private Equity

Guest columnist Andre Boreas takes a look at the alternative investment universe year-to-date 2015 by the numbers.Read More


PwC Looks Ahead to 2020: Offers a Roadmap for Alternative Investment Managers

Jul 5th, 2015 | Filed under: Emerging markets, Hedge Fund Industry Trends, Hedge Fund Strategies, Infrastructure, Technology

PwC offers a glimpse of a 'day in the life' of a typical compliance analyst in 2015 and again in 2020. As these authors tell it, the day is filled with data, darkness, and drudgery at present, but it will be airy, alliterative, and analytical in another five years. Read More


The Core Satellite Model: How to Cut Hedge Fund Fees in Half Part II

Jun 25th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Fees, Hedge Fund Industry Trends, Performance, Analytics & Metrics

Andrew Beer continues his discussion on slashing hedge fund fees without burning yourself or your clients.Read More


Headline Factors and Hedge Fund Success

Jun 23rd, 2015 | Filed under: Indexes, Macroeconomics, Performance, Analytics & Metrics

European mandated hedge funds, benefitting from improved expectations regarding that region, are up 5.54% year to date, says Eurekahedge. Wait: improved expectations? Yes, notwithstanding continued Greek drama. Read More


Vindication for Pirrong and Irwin: Why Are Trafigura’s Profits Up?

Jun 22nd, 2015 | Filed under: Commodities, Derivatives, Indexes, Media Coverage of Hedge Funds

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


Mladina on Peeling the Onion: Looking for Idiosyncratic Skill

Jun 21st, 2015 | Filed under: Currencies, Emerging markets, Indexes, Performance, Analytics & Metrics

Factor models will evolve as researchers untangle what value is to be attributed to what factor. Model selection, then, has to remain flexible to keep pace with such research, and must of course remain useful for the investment decision makers. Read More


Hybrid Equity: Another Perspective on Private Equity

Jun 14th, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Hedge Fund Industry Trends, Liquid Alts, Private Equity, Retail Investing

Managers who offer funds that provide shorter time frames to investment exits, greater liquidity through a hedge fund structure, and employ the event-driven skill set that identifies and manages an investment portfolio yielding private equity-like returns are finding increased interest from an investment community seeking returns married with reasonable liquidity. Read More


Are CTAs mumbo jumbo or additive for a diversified hedge fund portfolio?

Jun 9th, 2015 | Filed under: Commodities, Hedge Fund Industry Trends, Hedge Fund Strategies

Guest columnist Don Steinbrugge looks at the value of trend-following CTAs in a portfolio.Read More


A New Index: The Eurekahedge 50

Jun 1st, 2015 | Filed under: Alternative Beta & Hedge Fund Replication, Indexes, Liquid Alts, Portable Alpha & Alpha/Beta Separation

It appears likely that the new index, the Eurekahedge 50, as well as the daily tracker index that has been built around it, will have aspirational significance. It is designed to set a bar that will be very difficult for other alpha seekers to clear, yet easy for replicators to follow. Read More


How to Cut Hedge Fund Fees in Half-Part One

May 31st, 2015 | Filed under: Fees, Hedge Fund Industry Trends, Institutional Investing, Performance, Analytics & Metrics

Guest columnist Andrew Beer takes on hedge fund fees. In part one of the series he looks at the investor aggregation model.Read More


Top Hedge Fund Managers: They Aren’t Wizards, but They Are Masters

May 28th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Real Estate

For Faille, the stand-out essay in this collection of case studies, from CNBC's Maneet Ahuja, concerns Marc Lasry and Sonia Gardner, of the Avenue Capital Group. As Myron Scholes says in his afterword to this volume, Lasry and Gardner take returns from those whose demand for liquidity makes them willing to give them up. Read More


Eurekahedge on Funds of Hedge Funds: A Downward Spiral

May 27th, 2015 | Filed under: Alpha Strategies, Fees, Hedge Fund Industry Trends, Hedge Fund Strategies

A new report by Eurekahedge says that the rise of new products such as hedge fund trackers and related developments since the global financial crisis have set the fund of funds world into a downward spiral whence it has yet to recover. Read More


Study: Corporate/Government Cronyism Does Create Alpha

May 3rd, 2015 | Filed under: CAPM / Alpha Theory, Indexes

A new report finds that firms where current public officials are destined to become employees outperform other private firms by 7.43% per year during the three years before the officials/employees pass from one post to the other. The outperformance is highest in the year immediately before the switch, Justas a cynic looking for corrupt quid pro quos would suspect. Read More


Eurekahedge on Asia in March, and on Asia Over the Years

Apr 28th, 2015 | Filed under: Currencies, Emerging markets, Hedge Fund Strategies, Indexes, Performance, Analytics & Metrics

According to Eurekahedge the hedge fund industry globally returned $54.1 billion in performance gains in the first quarter 2015. This is the greatest first-quarter gain since before the global financial crisis. Read More