Updated 1X0/X0 leader board

130/30 29 Oct 2007

AllAboutAlpha.com is in New York today at yet another hedge fund conference (see posting below).  But first, some breaking news….

Back in April, we told you about a survey of 130/30 assets by Pensions & Investments.  At the time, P&I said there was approximately US$30 billion invested in 130/30 “or similar” strategies.  The article, “130/30 pull in $30 billion” came with a listing of the major 130/30 managers of the time.

According to an update today by P&I, the industry has grown by an astonishing $23 billion.  Yes, that’s a 77% growth over April’s figure.  What makes this growth more astounding is the fact that, as many institutional sales people know, most investors don’t make investment decisions over the summer.  Here’s the updated league table.

As you will note if you check out the table, over 60% of the growth comes from only six providers: State Street, BGI, Jacobs Levy, Goldman, Analytic and Aronson+Johnson+Ortiz.  This level of industry concentration reminds us of the hedge fund industry (see related posting).

Today’s ranking contains 21 more managers than April’s edition – although one of them, Oakbrook Investments made the list with a reported “$0” in the strategy (kudos to the marketing guy for getting his firm on the list anyway).

P&I points out that their figure is a little lower than some other industry estimates since it doesn’t consider Renaissance’s 175/75 fund to be kosher – it has a beta of only 0.4.

According to the newspaper, fundamental managers prospered at the expense of quants in August.  Quant 1X0/X0 funds stank in August along with their market neutral cousins, giving fundamental managers like JP Morgan and UBS a chance to make their case.

One supplier told P&I that the majority of short-extension mandated have so far been awarded by defined benefit pension plans, but that endowments and foundations were “starting to take notice”.

Be Sociable, Share!

Leave A Reply

← First Quadrant challenges convention on short-extension strategies Two ways to present "balance" in 130/30 discussion →