Browsing: Newly Added

Newly Added

Aquila Asks: Who’s Afraid of Pricey Markets?

Jan 18th, 2018 | Filed under: Commodities, Commodities: Examples, Finance & Economics, Gold, Newly Added, The Global Economy & Currencies

A new paper from Aquila Capital Group looks at managed futures, and makes the case that they offer investments tools with which one can achieve a “robust and diversifying risk/return profile.” The paper begins with the concerns many investors have at present. Record long bull markets, high asset prices, andRead More


CRYPTOCURRENCIES – HOT BUY OR HOT AIR?

Jan 17th, 2018 | Filed under: Currencies, Digital currencies, Emerging Alternative Investments, Newly Added, Other Topics in A.I., The Global Economy & Currencies

By Diane Harrison With traditional stock markets offering robust gains in 2017 and looking poised to continue their attractiveness in 2018, investors need strong persuasion to shift their equity allocations elsewhere. Enter the latest media darling: cryptocurrencies. The alternatives news feeds are awash in stories extolling the meteoric rise ofRead More


Stockholder Inspection Rights Survive Challenge in Delaware

Jan 16th, 2018 | Filed under: Equity Types of Private Equity, Newly Added, Private Equity, Private Investments, Regulatory Environment, The A.I. Industry

On December 29, 2017, the last business day of the expiring year, the Delaware Chancery Court, in a memorandum of opinion by Vice Chancellor Slights, upheld stockholders’ statutory books-and-records inspection rights against a defendant corporation that sought to invoke and considerably to widen the scope of the Delaware Supreme Court’sRead 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


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


Principles, ESG, and Credit Risk

Jan 11th, 2018 | Filed under: Newly Added, Other Issues in Private Investments, Other Topics in A.I., Socially responsible investing, SRI and Clean Energy

The UN Principles for Responsible Investment (PRI), an initiative working to put into practice six principles on the environmental, social, and governance (ESG) aspects of investment decisions, in partnership with the UNEP Finance Initiative and the UN Global Compact, has issued a paper on the credit ratings agencies and theirRead More


A Proposal for a Monthly Art Market Index

Jan 9th, 2018 | Filed under: Emerging Alternative Investments, Newly Added, Other Topics in A.I., Real Assets

It has long been understood that ownership of works of art isn’t just a collection or a hobby, or a way to brighten up the walls of one’s home. It’s a portfolio decision. But it is a portfolio decision that involves non-fungible and very infrequently traded assets.  So: how doesRead 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


Women on Boards: Different Markets, Different Trends

Jan 4th, 2018 | Filed under: Newly Added, Other Topics in A.I., Socially responsible investing

The latest MSCI “Women on Boards Progress Report” notes that the advancement of women onto corporate boards and into the corporate suites of corporations with global reach has been slow. Until recently, MSCI had anticipated that 30% of the company board seats on the MSCI All Country World Index (ACWI)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


How Random is the Walk? Bond Market Empiricism

Jan 2nd, 2018 | Filed under: Behavioral finance, CAPM / Alpha Theory, Finance & Economics, Financial Economics Theory, Newly Added

A new paper, forthcoming in the Journal of Empirical Finance, looks at the corporate bond market, and looks specifically for behavioral biases. Although it finds some, it also finds that they are small, and can’t serve as the foundation for a profitable trading strategy. Though its route is roundabout, theRead More


Top 5 Alpha Stories of 2017

Dec 31st, 2017 | Filed under: Business News, Commodities, Commodities: Examples, Finance & Economics, Insolvency, Newly Added, oil, The A.I. Industry

In surveying this year for dramatic alpha-related stories, we have much whence to choose. This was the year in which the Murdoch family announced its intention to sell some of their highest value holdings to Disney. Also, in 2017 the EQT Rice merger (contested, unsuccessfully, by one prominent hedge fundRead 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


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


The Performance of Impact Investments

Dec 26th, 2017 | Filed under: Newly Added, Other Topics in A.I., Social investing, Socially responsible investing

The Global Impact Investing Network has offered its own take on a much discussed question: do “impact investing” and its variants under various names – sustainable investing, socially conscious investing, ESG investing, etc. – work? And, if so, how well? It looks at this question in a very granular way,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


Benchmarking Distributed Ledger Technology

Dec 21st, 2017 | Filed under: Digital currencies, Emerging Alternative Investments, Newly Added, Other Topics in A.I.

Two scholars affiliated with the Cambridge Centre for Alternative Finance, in Great Britain, have prepared a fascinating overview of the present state of blockchain and distributed ledger technology (DLT). Dr. Garrick Hileman and Michel Rauchs, respectively a Research Fellow and a research assistant, have gathered data from more than 200Read 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


Blackstone Looks at the Secondary Private Equity Market

Dec 19th, 2017 | Filed under: Newly Added, Private Equity, Private Investments

An October paper put out by Strategic Partners Fund Solutions, of Blackstone, argues that (despite risks and drawbacks) investing in the secondary private equity market  can still be a smart play, offering “accelerated returns with lower volatility, lower loss rates, and greater downside protection” than the primary market. The secondaryRead 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


The Transformation of the Global Reinsurance Industry

Dec 14th, 2017 | Filed under: Emerging Alternative Investments, Newly Added, Other Issues in Private Investments, Other Topics in A.I.

A new paper from Milliman, a consultant to the insurance and financial services industries, discusses the ongoing transformation in and of the global reinsurance industry that alternative investment has created. About 20 years ago, in the wake of Hurricane Andrew and the Northridge earthquake, catastrophe bonds caught on as aRead 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


Deloitte on Initial Coins Offerings (ICOs) as IPOs

Dec 10th, 2017 | Filed under: Currencies, Digital currencies, Emerging Alternative Investments, Newly Added, Other Issues in Private Investments, Other Topics in A.I., Private Investments, The Global Economy & Currencies

An October 2017 white paper from Deloitte discusses the extent to which the offerings of tokens built upon blockchains have become the new IPOs of the crypto era. There are no binding rules about how to execute an initial coin offering (ICO). Nonetheless, there have been enough of these soRead More


Around the World with a Timberland Outlook

Dec 7th, 2017 | Filed under: Natural Resources and Land, Newly Added, Real Assets, SRI and Clean Energy

New Forests, an Australia-based investment manager focusing on strategies in forestry, land management, and conservation, has published its 2017 Timberland Investment Outlook. This paper begins with the observation that institutional investment in timberland now amounts to more than $100 billion. This makes it still a “relatively small” asset class, butRead More


Regulatory Challenges Posed by Crypto Funds

Dec 5th, 2017 | Filed under: Commodities, Currencies, Digital currencies, Emerging Alternative Investments, Finance & Economics, Hedge Funds, Newly Added, The Global Economy & Currencies

A forthcoming paper in the Stanford Journal of Law, Business, and Finance looks at the cryptocurrency markets (bitcoin and its kin), the hedge funds that look to make money from them and the operational issues involved. Two independent scholars collaborated on writing the paper: Edmund Mokhtarian and Alexander Lindgren. AlthoughRead More


Bain on Dry Powder and High Asset Prices

Dec 3rd, 2017 | Filed under: Newly Added, Other Issues in Private Investments, Private Equity, Private Investments

Bain & Co., a consultancy to the private equity industry, has issued its Global Private Equity Report 2017. One central theme of the report is that prices of desired assets aren’t merely high, they are “structurally high,” and thus likely to remain so. They are high because there is aRead 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


WHAT CHALLENGES LIE AHEAD FOR ALTERNATIVES IN 2018?

Nov 29th, 2017 | Filed under: Newly Added, The A.I. Industry

By Diane Harrison With year-end holidays approaching and investment action wrap-up and forward planning in process, investors are bracing for change in many formats. November seems like a good time to take an industry snapshot survey of portfolio managers, wealth advisors, regulatory professionals, and the like, and ask them aRead 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


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


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


Artificial Intelligence and Productivity: NBER Takes a Look

Nov 21st, 2017 | Filed under: Business News, Finance & Economics, Macroeconomics, Newly Added, The Global Economy & Currencies

A new working paper from the National Bureau of Economic Research, in Cambridge, Mass., discusses what its authors see as a paradox: although artificial intelligence has made astonishing advances in the last 20 years, taking along with it related technologies and stock prices, real income has stagnated, and productivity seemsRead More


QUANT STRATEGIES IN THE CRYPTOCURRENCY SPACE

Nov 21st, 2017 | Filed under: Digital currencies, Emerging Alternative Investments, Newly Added, Other Topics in A.I.

By Nicolas Rabener, FactorResearch Factor Investing in the Wild West of Financial Markets Summary: Cryptocurrencies have reached a market capitalisation of > $150bn Backtesting quantitative strategies is difficult given a limited trading history & universe Short-term Momentum works very well, classic factor investing strategies less so INTRODUCTION The year 2017Read More


Selecting an Optimal Private Equity Fee Validation Methodology

Nov 20th, 2017 | Filed under: Newly Added, Private Equity, Private Investments

By Alex Tarantino These are good times to be a private equity fund investor.  Returns have been strong with distributions on the rise, both in the U.S. and Europe. Limited partners, for their part, have voted with their wallets that the asset class will continue to outperform. Indeed, fundraising continuesRead 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


Amato on the Late-Cycle Dilemma

Nov 16th, 2017 | Filed under: Business News, Newly Added, Other Topics in A.I., Personalities in AI

Joseph V. Amato, president of Neuberger Berman Group LLC and Chief Investment Officer – Equities at Neuberger Berman, has written a thoughtful discussion of late about where the markets, and the business cycle, stands. This, the end of 2017, is a “late cycle” moment. Equities continue to rise, but theRead 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


4 Lessons from the EQT Proxy Context

Nov 14th, 2017 | Filed under: Business News, Equity Hedge Funds, Event-Driven Hedge Funds, Finance & Economics, Hedge Funds, Newly Added

D.E. Shaw & Co., a hedge fund manager with an activist strategy and with about 4% of the equity in EQT Corp., said on September 14 that it thought the then-pending acquisition of Rice Energy Inc (RICE) by EQT should be contingent on two commitments: first, that EQT would mergeRead 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


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


Algorithmic Traders: Proprietary, Agency, Liquidity

Nov 9th, 2017 | Filed under: Algorithmic and high-frequency trading, Business News, Finance & Economics, Newly Added

Two scholars affiliated with the Indian Institute of Management, in Calcutta, have posted a paper about the effects of algorithmic trading on liquidity. This paper, by Samarpan Nawn and Ashok Banerjee, based on the first chapter of Nawn’s Ph.D. dissertation, distinguishes sharply between proprietary algorithmic traders and agency algorithmic traders,Read More


Due Diligence Requires Deep Dives into Data

Nov 7th, 2017 | Filed under: Due Diligence Process, Newly Added, Private Investments, Risk Management & Operations, Risk Metrics and Measurement

The data and analysis provider eVestment has issued a new white paper on “enhancing private equity manager selection with deeper data.” PE funds below the top quartile have not materially outperformed the public markets as a matter of history. So for an institutional investor, earning alpha is in large measureRead 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


Lazard Research on Smart Beta

Nov 5th, 2017 | Filed under: Behavioral finance, Due Diligence Process, Finance & Economics, Financial Economics Theory, Newly Added, Other Topics in A.I., Risk Management & Operations, Smart Beta

Jason Williams, senior vice president at Lazard Asset Management, has written a white paper on the “six sins of smart beta.” First: what is smart beta? Academic studies indicate anomalies in the markets that somehow don’t get arbitraged away.  These become identified as “factors” and indexes can be designed soRead More


Federal Reserve on Counterparties to the next Lehman Brothers

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

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


FACTOR RETURNS: SMALL VS. LARGE CAPS

Nov 1st, 2017 | Filed under: Finance & Economics, Newly Added, Other Topics in A.I.

By Nicolas Rabener, FactorResearch Are Factor Returns Limited to Small Caps? Summary: A frequent criticism of factor investing is that factor returns are stronger in small caps; Our research highlights that this is not uniformly true across factors; and Value and Size benefit most from including small caps. INTRODUCTION FactorRead 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


China and a Reduced Form Bayesian VAR

Oct 29th, 2017 | Filed under: Commodities, Finance & Economics, Newly Added, The Global Economy & Currencies

What the heck does the forbidding phrase “reduced form Bayesian VAR” mean? Let’s break this down. The VAR in question isn’t VaR (Value at Risk). It’s Vector Autoregression. This is a stochastic process model employed to understand the linear dependences among multiple time series. Each variable in a VAR hasRead More