Heard by the waters of Lake Geneva

Heard on the floor at Terrapinn’s “Hedge Fund Replication & Alternative Beta” conference in Geneva so far today…

“His trading process may be “naive”, but his fees sure aren’t!”

– Professor Harry Kat on the hedge fund replication strategy pursued by another well-known firm.

“The asset information submitted to any of the databases is absolutely useless.  How many of the biggest hedge funds in the world actually provide an information to any database?  BGI, one of the world’s largest hedge fund managers, does not submit its data to any of the hedge fund indexes.”

“Five years from now, all hedge fund replicators will be out of business.  We’ll all look back and think ‘what a silly idea that was’!”

– Stan Beckers, Head of Alpha Management, BGI on hedge fund databases and hedge fund cloning in general

“Tom Schneeweis and I published our own hedge fund replication results on our website 6 years ago.  But we only got 2 phone calls…No one cared…so eventually we stopped doing it.  Apparently we should have continued.”

– Hossein Kazemi, Center for International Securities and Derivatives Markets (CISDM), jokes about his sense of timing in front of an overflow conference audience

Click below for more quotes from the lakeside…

“Hedge fund replication opponents say you can’t drive a Ferrari looking out the rear-view mirror.  But don’t forget: it’s illegal to drive without a rear-view mirror.”

– Bill Fung, London Business School, on the relevance of recent return history

“But I would say we’re not a hedge fund. We’re just trying to replicate the dynamics of the hedge fund asset class – just without the drawdowns…I have very little interest in replicating the drawdowns”

– Gavyn Davies, Fulcrum Asset Management, in response to an audience question about whether his new hedge fund replication product was itself a hedge fund.

“In this ‘alpha-centric’ industry, it’s important for clients to have a good benchmark…If you think you can beat ABI (JP Morgan’s Alternative Beta Index), by all means come and short it.”

– Lakshmi Seshadri, JP Morgan on the role of a good hedge fund (replication) index

“Replication is a natural extension of the index business.”

– Philippe Schenk, Credit Suisse/Tremont Index LLC

“This is one more step toward reliable separation of true alpha from beta…”

– Yazid Sharaiha, Morgan Stanley, on the firm’s new “Altera” hedge fund clone

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