Browsing: Structure of the Hedge Funds Industry

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Structure of the Hedge Funds Industry

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


A Rhetorical Oracle?

Feb 26th, 2018 | Filed under: Fees, Hedge Fund Industry Trends, Newly Added, Risk Metrics and Measurement, Structure of the Hedge Funds Industry, What about beta?

By Bill Kelly, CEO, CAIA Association Warren Buffett cashed out his bet and the final numbers are in courtesy of the Oracle’s annual shareholder letter. Unfortunately, the most important investment lessons have been completely lost, as the media and the investment sage have mostly used this as an opportunity toRead 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


Eurekahedge: Greater China Mandates Pay Off for January

Feb 20th, 2018 | Filed under: Commodities, Commodities, Commodities: Examples, Digital currencies, Emerging Alternative Investments, Energy, Gold, Hedge Fund Industry Trends, Hedge Fund Strategies, Hedge Funds, Indexes, Investing in Commodities, Newly Added, oil, Other Topics in A.I., The A.I. Industry

A new Index Flash Update from Eurekahedge says that hedge funds are off to a positive start to 2018. The industry globally gained 2.26% in January. Among developed world mandates, North American hedge funds were up 1.89%, followed by those of Japan and Europe, which gained 1.28% each. Higher numbersRead 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


FACTOR INVESTING: GROSS TO NET RETURNS

Jan 15th, 2018 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Funds, Newly Added, The A.I. Industry

By Nicolas Rabener, FactorResearch From Theory to Reality Summary: Long-short multi-factor portfolios generate attractive returns before fees Post fees charged historically returns are much less attractive However, some fees in the long-short space are likely justified given higher complexity INTRODUCTION Reality is the murder of a beautiful theory by aRead 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


Deloitte on the 2018 Outlook for Managers

Dec 29th, 2017 | Filed under: Hedge Fund Industry Trends, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

A new Deloitte report on the year ahead says that 2018, globally, “could be the year that records the highest average [mergers and acquisitions] deal value” for the investment manager sector. Also, this will be a big year for artificial intelligence and machine-learning algorithms; Deloitte predicts that 70% of newRead More


HARK! The Allocators Sing…

Dec 20th, 2017 | Filed under: Hedge Fund Industry Trends, Hedge Funds, Newly Added, The A.I. Industry

By Diane Harrison 2017 will be a hard year for allocators and investors to get excited about hedge fund performance versus US equities. Hedge funds returned on average about 6% in the first 11 months of 2017, significantly lagging the stock market, which was up over 20% for the sameRead More


PwC Charge: Asset Managers are Digital Tech ‘Laggards’

Nov 30th, 2017 | Filed under: Hedge Fund Industry Trends, Industry Size & Managers, Newly Added, Technology, The A.I. Industry

A new paper from PricewaterhouseCoopers on the coming transformations in the asset and wealth management industries says that firms in this market must adapt or die. And the adaptation the authors have in mind isn’t just the usual Darwinian metaphor – managers must “become business revolutionaries, even disruptors” in orderRead More


HOW MUCH OF YOUR ALPHA DO YOU PAY AWAY TO YOUR HEDGE FUND MANAGERS?

Nov 27th, 2017 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

Introduction to TK Fee-to-Alpha ratioTM (TKFA)                    By Tanuj Khosla, CFA, CAIA, MBA INTRODUCTION The construction of hedge fund portfolios by institutional investors around the world has been a combination of both science and art over the years. While some use a strict quantitative methodology like Risk Budgeting and/or SharpeRead 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


HEDGE FUND FACTOR EXPOSURE & ALTERNATIVES

Nov 15th, 2017 | Filed under: Hedge Fund Industry Trends, Hedge Funds, Indexes, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

By Nicolas Rabener, FactorResearch Alternatives to Alternative Investments? Summary: Equity hedge fund returns have been disappointing over the last 14 years An exposure analysis shows no structural factor exposure, but frequent factor rotation Multi-factor long-short products are an interesting alternative, depending on the fee level INTRODUCTION Hedge fund assets reachedRead More


Hedge Fund Fees Are Only Half the Problem

Nov 13th, 2017 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

By Ben McMillan Hedge funds talk big about returns. Historically, successful managers have claimed credit for the favorable risk/return profiles of their funds, touting skilled security selection and portfolio management as a competitive edge. But the advent of investible benchmarks for a number of hedge fund strategies prove there’s moreRead More


Are Clearinghouses Systemically Risky? Gary Cohn is Heard From

Oct 31st, 2017 | Filed under: Business News, Hedge Funds, Insolvency, Newly Added, Structure of the Hedge Funds Industry

Economists sometimes cite a “law of unintended consequences.” This is what it sounds like, the principle that actions of people, inclusive of and perhaps (depending on who is writing) especially the actions of a government, have unanticipated and (as far as third party observers can judge intentions) unintended consequences. InRead More


Cautious Numbers Estimates: A Comparative Look

Sep 26th, 2017 | Filed under: Hedge Fund Industry Trends, Hedge Funds, Industry Size & Managers, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

On August 29, we at AllAboutAlpha ran a summary of the latest Eurekahedge report, saying that total hedge fund industry assets around the globe were $2.33 trillion, and that this figure was up by $108.6 billion over the first seven months of 2017. We heard soon thereafter from a readerRead More


Investor Sentiment: Fees, Redemptions, Structures

Sep 4th, 2017 | Filed under: Alternative Investments in Context, Hedge Funds, Industry Size & Managers, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

Credit Suisse, in its new report on its mid-year survey of hedge fund investor sentiment, says that there is “continued appetite to allocate to hedge funds” and that there is increased interest, especially, in quantitative strategies. Specifically, 81% of investors say that they will likely make allocations to hedge fundsRead More


Eurekahedge Reports: Total Industry Assets Stand at $2.33 Trillion

Aug 29th, 2017 | Filed under: Industry Size & Managers, Newly Added, Other Topics in A.I., SRI and Clean Energy, Structure of the Hedge Funds Industry, The A.I. Industry

Eurekahedge’s August report says that the Eurekahedge Hedge Fund Index grew by 0.88% in July 2017, while the underlying markets represented by the MSCI World Index grew by 1.64%. For June, overall, managers reported performance based losses of $8.4 billion, so that the industry growth was due entirely to netRead More


Half-Time Report on PwC’s Vision for Asset Management

Aug 20th, 2017 | Filed under: Fees, Industry Size & Managers, Newly Added, Regulatory, Regulatory Environment

Three years ago PwC published a paper on what they expect the asset management world will look like in 2020 – which is, as it happens, three years from now. We have reached the half-point in the hypothetical timeline. Much in the report still holds up, though of course itRead More


Hedge Fund Gigantism is Not Necessary

Jul 30th, 2017 | Filed under: Fees, Hedge Funds, Newly Added, Seeding/early-stage, Structure of the Hedge Funds Industry

A joint survey by the Alternative Investment Management Association and GPP, the financial services firm formerly known as Global Prime Partners, disaggregates the hedge fund industry by size. It finds that the dynamics of the smallest (emerging-funds) sector looks very different once the “billion dollar club” and even the medium-sizedRead More


AIMA Gets Its Groove On: Two New Guides

Jul 25th, 2017 | Filed under: Hedge Fund Industry Trends, Newly Added, Structure of the Hedge Funds Industry

The Alternative Investment Management Association, the global AI industry group, has been busy of late. Its recent publications include a Best Execution Guide for the European Union’s revised Markets in Financial Instruments Directive (MiFID 2) and a guide to fund administration. Fund Administration The AIMA guide on fund administration reworksRead More


New Technologies Adding to Pressure on Fees

Jun 25th, 2017 | Filed under: Fees, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

A new paper proposes that emerging technologies (blockchains, Big Data and artificial intelligence) have increased pressure on the traditional hedge fund fee structure of 2 + 20. Its author is Wulf A. Kaal, an Associate Professor at the University of St. Thomas and director of the Private Investment Fund Institute.Read More


First Quarter: An Industry Recovers From a Dry Spell

May 18th, 2017 | Filed under: Hedge Funds, Industry Size & Managers, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

Preqin’s review of the hedge fund space in the first quarter of 2017 describes the quarter as a time of “return to form” after a dry spell. Two thirds of the investors interviewed by Preqin at the end of 2016 had said that their hedge fund investments had failed toRead More


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