Browsing: Operations

Operations

A Fintech Revolution in Commercial Real Estate

May 9th, 2019 | Filed under: Newly Added, Real Estate, The A.I. Industry, Technology, Operationally Intensive Real Assets, Real Estate Equity Investments

Cushman & Wakefield, Chicago, has released a discussion of blockchains in connection with real estate. The paper argues that the technology could “transform CRE transactions ranging from property listings, asset management, and the purchase and sale of properties.” It reminds us that blockchains are shared digital ledgers, both tamper-proof andRead More


Are Data Scientists the ‘New’ Rockstars?

Mar 21st, 2019 | Filed under: Newly Added, Alternative data, The A.I. Industry, Technology, Operations, Risk Management & Operations

Daniel Hill, a research analyst for the global equity team at William Blair, has written an insightful piece about the hot competition for data scientists underway in the alpha-seeking world today.  Hill begins with the observation that there are lots of different buzzwords, hashtag-worthy words and phrases, at use inRead More


Assessing Risk Measurement for a Portfolio of Hedge Funds

Jan 27th, 2019 | Filed under: Newly Added, Hedge Fund Industry Trends, Hedge Fund Operations and Risk Management, Hedge Fund Strategies, The A.I. Industry, Risk management, Technology, Hedge Funds, Risk Metrics and Measurement, Risk Management Strategies & Processes, Structure of the Hedge Funds Industry, Risk Management & Operations

Two scholars, Shubeur Rahman and Ranjan Bhaduri, have in a new paper taken a fresh look at a long-standing dilemma in the alternative investments industry. The question is: how should investors in hedge funds (especially in a multi-asset class, multi-strategy portfolio of hedge funds) measure the market risk inherent inRead More


Dark Pools and the Value of Information

Jan 16th, 2019 | Filed under: Newly Added, The A.I. Industry, Operations, Hedge Funds, Event-Driven Hedge Funds, Risk Management & Operations

Activist hedge funds can always be expected to trade both in lit exchanges and in dark pools, in the course of accumulating the equity stake that in turn will give them sway at an annual meeting or inside the boardroom. That is one inference from a model developed for theRead More


Risks & Rewards: The Future of Finance in Blockchain

Jan 6th, 2019 | Filed under: Newly Added, The A.I. Industry, Risk management, Technology, Operations, Emerging Alternative Investments, Digital currencies, ETFs, Smart Beta, Risk Management Strategies & Processes, Risk Management & Operations, Other Topics in A.I.

A new article by Dave Dowsett and Heather Wied, both of Invesco, looks at blockchains and the way this new technology, precisely as it divorces itself from its original significance as a feature of the cryptocurrencies, is ready to transform finance. Dowsett and Wied contend that blockchain “offers the possibilityRead More


Leveraging and Enhancing Catastrophe Models

Dec 27th, 2018 | Filed under: Newly Added, The A.I. Industry, Risk management, Operations, Emerging Alternative Investments, Risk Metrics and Measurement, Risk Management Strategies & Processes, Risk Management & Operations, Other Topics in A.I.

I write these words soon after reading the news from Sundra Strait, Indonesia. In recent days, the eruption and collapse of a volcano there has set off a tsunami that in turn has devastated the coastal regions of Banten and Lampung, also in Indonesia. Much time may have to passRead More


Steamrollers, Geniuses and Market Crashes

Nov 27th, 2018 | Filed under: Newly Added, Hedge Fund Operations and Risk Management, The A.I. Industry, Risk management, Operations, Hedge Funds, The Global Economy & Currencies, Risk Management Strategies & Processes, Relative Value Hedge Funds, Risk Management & Operations, Finance & Economics

McGraw Hill Education has brought out a new book by Bruce I. Jacobs, of Jacobs Levy Equity Management. The book, Too Smart for our Own Good, concerns “ingenious investment strategies, illusions of safety, and market crashes.” The thesis is that the financial crises of recent decades are the consequence ofRead More


Digitization of alternative investments: the rise of technology

Nov 20th, 2018 | Filed under: Newly Added, Private Equity, The A.I. Industry, Venture capital, Technology, Operations, Hedge Funds, Other Issues in Private Investments, Private Investments, Risk Management & Operations

KPMG, the auditing giant based in the Netherlands, has put out a white paper on the “digitization mandate” in the alternative investment space.  It maintains that fund managers who “dawdle” in digitizing their business are acting foolishly, falling behind the expectations of their actual and potential investors. Consider fees. PreqinRead More


Neural Networks and EPS Prediction

Jul 12th, 2018 | Filed under: Newly Added, Technology, Risk Management Strategies & Processes, Risk Management & Operations, Other Topics in A.I.

Yes, it sounds a bit like the phrase “jumbo shrimp,” in terms of sense, but a “long short-term memory neural network” is an important recent advance in artificial intelligence research. The term refers to a neural network devised with “forget gates” attached to cells of memory, originally in order toRead More


Blockchains: Hyped but Here to Stay

Jun 17th, 2018 | Filed under: Newly Added, Operations, Risk Management & Operations

In a recent white paper, a trend analyst and a portfolio manager at Robeco put their heads together to look at the value of blockchains, or more formally of “distributed ledger technology,” in the financial world. Jeroen van Oerle (the analyst) and Patrick Iemmens (the manager) contend that there isRead More


Urgent vs. Important: Barriers to Digitization in Alternative Investing

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

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


PwC Charge: Asset Managers are Digital Tech ‘Laggards’

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

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


Federal Reserve on Counterparties to the next Lehman Brothers

Nov 2nd, 2017 | Filed under: Newly Added, Service Providers, Insolvency, Operations, Business News, Risk Management & Operations

The Federal Reserve has issued a final rule relating to the qualified financial contracts (QFCs) of global systemically important U.S. banking institutions (GSIBs). Derivatives & Repo Report, a blog maintained by the international law firm Perkins Coie, has done a thorough write-up on the subject, to which the material belowRead More


DTCC: How to Think About Fintech

Oct 24th, 2017 | Filed under: Newly Added, Operations, Risk Management & Operations

The Depository Trust and Clearing Corporation (DTCC), a provider of clearance, settlement, and a wide range of other services to the financial markets, has issued a new white paper on technological innovations and the disruptions fintech may generate. The report begins with a quotation from a speech given by LaelRead More


AIMA’s New Due Diligence Template

Oct 22nd, 2017 | Filed under: Newly Added, Service Providers, Due Diligence Process, Technology, Operations, Partner accounting, Risk Management & Operations

It has been 20 years since the Alternative Investment Management Association published its first due diligence questionnaire, a template designed to standardize the diligence process by which investors decide if a particular management is right for them. Now it has published a new questionnaire/template, covering a broader range of entities/strategies.Read More


Barnes on Swaps Transparency under  MiFID II

Sep 19th, 2017 | Filed under: Newly Added, Investing in Commodities, Operations, Commodities, Structured Products, Risk Management & Operations

A recent blog in the TABB Forum, by Chris Barnes of Clarus Financial Technology, looks at recent developments in the realm of MiFID, and looks forward. The UK’s Financial Conduct Authority in August of this year authorized certain Approved Publication Arrangements (APAs) for reporting under MiFID II.  The authorization ofRead More


The Federal Reserve on Distributed Ledger Technology (that is, on Blockchains)

Jan 5th, 2017 | Filed under: Newly Added, Operations, The Global Economy & Currencies, Risk Management & Operations, Finance & Economics

A large team of officers and staff affiliated with the Federal Reserve (eight with the Board in DC, five with the FR Bank of New York, one with the FRB of Chicago) have collaborated on a new paper on distributed ledger technology in payments, clearing, and settlement. Of necessity, givenRead More


Commissioner Piwower and Alpha Seekers

Nov 15th, 2016 | Filed under: Newly Added, Operations, Hedge Funds, Event-Driven Hedge Funds, Commodities, Risk Management & Operations

With a new administration in the making, thoughts in the world of asset management naturally turn to the issue of appointments to the Securities Exchange Commission and the Commodity Futures Trading Commission. Who is likely to get what position and what difference might it make? Recent practice has been thatRead More


Academics:  No, Navinder Sarao Did Not Cause the Flash Crash 

Oct 25th, 2016 | Filed under: Newly Added, Hedge Fund Operations and Risk Management, Algorithmic and high-frequency trading, Risk management, Technology, Operations, Personalities in AI, Business News, Risk Management & Operations, Finance & Economics

Mid-October news reports tell us that Navinder Sarao has lost his effort to avoid extradition from Britain to the United States. So he will face charges in the U.S. in connection with the “flash crash” of May 2010, the incident in which the DJIA fell 998.5 points in less thanRead More


Escape to the Internet? Or Build Better Communities?

May 8th, 2016 | Filed under: Newly Added, Currencies, Technology, Operations, The Global Economy & Currencies, Digital currencies, Risk Management & Operations, Other Topics in A.I.

Dissatisfaction with the fiat money issued by or on signals from central bankers will not go away. Talk of “printing press” money seems quaint, as when people of my generation still refer to a keyboard as a “typewriter.” Central banks and their servants (and their servers) around the world engage,Read More


Andrew Lo: Progress is the Platform for Ever-Changing Risk

Feb 28th, 2016 | Filed under: Newly Added, Risk management, Partner accounting, Risk Management Strategies & Processes, Risk Management & Operations

Andrew Lo, of the Massachusetts Institute of Technology, recently wrote a stimulating discussion of two seemingly contrary “laws”: Moore’s and Murphy’s. Read More


AIMA’s Guide to the Bamboo Bridge of Operations

Feb 15th, 2016 | Filed under: Newly Added, The A.I. Industry, Due Diligence Process, Regulatory Environment, Operations, Risk Management Strategies & Processes, Risk Management & Operations

How sturdy can a bamboo bridge be? The front page of a new Guide from The Alternative Investment Management Association consists of a photo of a bamboo bridge, apparently on a beach, as seen from below. That is, this is the view of someone on whom the bridge would fall,Read More


“We Aren’t Obsolete,” Says DTCC White Paper

Feb 4th, 2016 | Filed under: Newly Added, Service Providers, Technology, Risk Management & Operations

The Depository Trust and Clearing Corporation has issued a new white paper on block chains and their significance in the context of the post-trade landscape. Block chains, also known as distributed ledgers, are a hot new technology, made so in large part by the cryptocurrency Bitcoin and by the publicityRead More


After Seven Years: Philosophical Implications of the Madoff Fraud

Dec 30th, 2015 | Filed under: Newly Added, Derivatives, Due Diligence Process, Operations, Equity-linked Structured Products, Personalities in AI, Risk Management & Operations

It has been seven years and a few days more now since Bernard Madoff acknowledged to authorities that “there is no innocent explanation” for the story they had just heard from his sons. It has been 15 and a half years since Harry Markopoulos ran the numbers regarding Madoff’s performanceRead More


The Elusiveness of the Natural Block Trade

Nov 1st, 2015 | Filed under: Technology, Operations, Business News

Trading on natural blocks is a very desirable goal. So why aren't more traders doing it? How hard are they trying? Some questions from a TABB paper, and from an intriguing commenter at TabbForum. Read More


Study Shows Divergence in Fund Expense Disclosure

Oct 29th, 2015 | Filed under: Operations

The analytic company Convergence concludes from its research -- a study of 2,600 ADVs -- that there is a lot of variance in the “depth, breadth, and quality of expense disclosure practices” across fund types and strategies. Read More


Enterprise Software Marketers Confirm: Seven is a Sacred Number

Jul 21st, 2015 | Filed under: Regulatory, Technology

God rested on the seventh day of the week of creation. Ever since, the number seven has stood for the completion of an epoch, or of a perfect set. Thus, a German enterprise concern has now listed the "seven pillars" for improved market surveillance through software.Read More


Climate Finance: A Priority for the MDBs

Jul 15th, 2015 | Filed under: Social investing, Socially responsible investing, Technology, Climate change

A new report from the World Bank says that six multilateral development banks delivered more than $28 billion in financing in 2014 that "address climate change" in one of two ways, mitigation or adaptation. Read More


Aleynikov Again: State Jury Conviction Set Aside

Jul 8th, 2015 | Filed under: Algorithmic and high-frequency trading, Technology, Legislation/Court rulings

The judge's ruling setting aside the jury's guilty verdict is, of course, grand news for Aleynikov. It is also the curtain on a sometimes farcical spectacle. But let us not forget that there are issues of principle involved. Read More


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

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

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


Spoofing: The ‘It’ Enforcement Action

Jun 17th, 2015 | Filed under: Algorithmic and high-frequency trading, Hedge Fund Strategies, Derivatives, Regulatory, Technology

Spoofing is probably about as ubiquitous as texting-while-driving. And it is possible to make an example of a spoofer caught red-handed. But it isn't clear what purpose that will serve. The real problem is that a broken market contains a broken set of incentives. Read More


Who Will Meet Yahoo at the Altar?

Jun 16th, 2015 | Filed under: Real Estate, Alpha Strategies, Technology, Intellectual Property

There was some excitement as recently as January 2015 over renewed talk of a Yahoo/AOL deal, but after the bloom finally came off that rose, YHOO settled into a trading range has been roughly from $42 to $46. Faille guesses that there is an opportunity here on the upside of that range, because another suitor is bound to appear.Read More


Java IP War: The Obama Administration Picks the Wrong Side

Jun 8th, 2015 | Filed under: Technology, Intellectual Property

The Solicitor General, speaking for the United States, has filed the expected amicus brief in the Google/Oracle showdown. The SG's position is that the Supreme Court should refuse to hear the case so that the lower courts can get back to using what the brief calls the "flexible fair use doctrine" to do justice. Read More


Copper Prices: Why the Downslope?

May 26th, 2015 | Filed under: Commodities, Hard metals, Risk management, Technology

How long will it take before the world again sees copper at around $10,000 a ton, the going price it touched (though briefly) in early 2011? Perhaps several more years and another full business cycle. There may be a lot of down before an upturn gets us there. Read More


What’s in a Copyright? Java API Case Before U.S. Supreme Court

May 25th, 2015 | Filed under: Institutional Investing, Technology, Intellectual Property

High-stakes litigation between Google and Oracle approaches its resolution at the Supreme Court. For seekers of alpha, this isn't just about what investments to make, but about the way one goes about making them, the very mechanics of trading. Read More


Northern Trust on Hedge Funds, Big Data and Transparency

May 20th, 2015 | Filed under: Institutional Investing, Alpha Hunters, Technology

The integration of data isn't fully on the hedge fund industry radar yet. Yet it may be critical to rebuilding manager-investor relations via whiz-bang 21st century technology. Read More


GOOG to Test Buy-on-Antitrust-Charge Theory

Apr 26th, 2015 | Filed under: Technology, Legislation/Court rulings, Alpha Seekers

Look for the EC sometime in the near future to bring a complaint about the contracts into which Google has entered with manufacturers that require them to construct the handsets in a way that favors Google’s famous search engine [over, for example, Microsoft’s Bing.] But consider that even this preliminary skirmish over comparison shopping might be a bullish sign for GOOG.Read More


Tax & Election Seasons Create Alternative Altercations in the US

Apr 20th, 2015 | Filed under: Real Estate, Venture capital, Legislation/Court rulings, Partner accounting

As a general rule, politicians [mostly] on the Democratic side benefit by raising the issue of the taxation of carried interest during campaigns and then quietly letting it die, as their donors expect, when the legislature is actually working on tax bills. It's a way of signaling who is a "populist" and who isn't. Read More


When I Learned Truth About RadioShack

Apr 13th, 2015 | Filed under: Hedge Fund Strategies, Insolvency, Technology

IT guys have been denigrating RadioShack, from their own perch of superiority, for a long time. The trouble is, while those IT guys were the future, RadioShack's customer base was fading into the past. Read More


Reflections on the MS Internet Explorer, R.I.P.

Apr 5th, 2015 | Filed under: Algorithmic and high-frequency trading, Technology, Legislation/Court rulings

The U.S. Department of Justice typically brings high-profile antitrust actions against 'monopolists' by piling its legal theories on top of dubious micro-economics. A recent announcement by Microsoft sends Faille down memory lane, to two 1990s era actions by the D of J against MS in the days when Bill Gates was still a great media ogre. Read More


A Taylor-Swift Lawsuit: ‘I’ve Got a Blank Space Baby.’

Mar 26th, 2015 | Filed under: Algorithmic and high-frequency trading, Hedge Fund Strategies, Derivatives, Technology

This is the story of one high-frequency trading firm suing one or more others and giving detailed credence to everything that has been said over the last year or so by those who bemoan the rise of HFT firms. Read More


The Next Big Thing: A Robotic ‘Nexus’ of Contracts

Mar 2nd, 2015 | Filed under: Currencies, Regulatory, Technology, Digital currencies

In some fairly routine middle-critter corporate roles, there may no longer be much need for human managerial involvement. Enter the self-running business entity: another big step toward the obsolescence of human beings some of whom, nonetheless, will get wealthy in the process. Read More


Debates Over Bayesianism Take Cartoon Form

Feb 10th, 2015 | Filed under: CAPM / Alpha Theory, Risk management, Technology

Regular readers of AllAboutAlpha know that Bayesianism, a movement with the world of probability and statistics, has a good deal to do with contemporary pricing models and portfolio theory. It also has foes in that world, the frequentists, and a 2012 cartoon, recently raised to salience again by a Facebook post, has given those frequentists reason to gripe about Bayesian smugness. Read More


Should Governments Slow Trading Down by Taxing It?

Feb 5th, 2015 | Filed under: Algorithmic and high-frequency trading, Hedge Fund Strategies, Regulatory, Technology

A physicist recently suggested that exchanges might do well to change the nature of the trading they host, holding batch auctions every one-hundredth of a second to better serve their real economic functions. Then a commenter proposed that taxation could achieve the same effect. Our physicist went back to the drawing board to consider this. Read More


Let’s Hope Nothing Comes of Sprecher’s Grand Bargain

Jan 13th, 2015 | Filed under: Algorithmic and high-frequency trading, Regulatory, Technology

Sprecher proposes that the exchanges and the investment banks enter into a deal, and that regulators confirm it by various tweaks in the NMS. The whole dynamic that the "grand bargain" represents is a disturing one, old-fashioned smoke-filled-room cronyism. Read More


Thoughts on Futurology and its Perils

Jan 6th, 2015 | Filed under: Algorithmic and high-frequency trading, Hedge Fund Strategies, Technology

The Permal Group takes a refreshingly modest view of the eventual impact of Big Data on the business model of hedge fund managers. The better the data about a corporation, the more accurate the stress testing. Yes, that seems reasonable. Read More


Plans for a Nickel-Tick Pilot: Trouble in the Details

Dec 15th, 2014 | Filed under: Algorithmic and high-frequency trading, Regulatory, Technology

Observers of the slow slog toward an empirical test of larger tick sizes have raised concerns about the details of the three-track plan under consideration. In particular, there's an order-protection feature for one of the three "tracks" that has raised the hackles of Larry Tabb and the STARead More


Qatar and the QIA: When the SWF Is Also a Family Office

Dec 10th, 2014 | Filed under: Commodities, Institutional Investing, Technology

The royal family in Qatar, the House of Thani, just took direct control of the emirate's sovereign wealth fund. Also, that fund just invested big in Uber, confirming its reputation as perhaps the worlds most aggressive deal-hunting institution. Read More


Big Data and Other Trends to Influence Hedge Funds in 2015

Nov 17th, 2014 | Filed under: Hedge Fund Industry Trends, Technology

Big Data makes possible new ranges of inferences, and gives value to new skill sets. There will continue to be plenty of roles for human beings in recognizing the shadows cast by the intense light emitted by new technologies.Read More


Bitcoin: Three Bits of News on a Microcosm

Nov 13th, 2014 | Filed under: Currencies, Technology, Digital currencies

A bitcoin-mining fire, a survey of small and medium businesses and their levels of preparedness for bitcoin customers, and a new criminal accusation against an alleged ponzi scheme: all conribute to the sense that bitcoin is a microcosm of the whole financial world, good and bad. Read More