Browsing: Liquidity

Posts Tagged ‘ Liquidity ’

Liquidity: Running for the Exits

Aug 15th, 2019 | Filed under: Newly Added, Risk management, Other Issues in Private Investments, The A.I. Industry, Risk Management Strategies & Processes, Hedge Funds, Risk Management & Operations

Liquidity vanishes when you need it most. That isn’t an especially original observation. It’s like saying that the exit doors are always jammed precisely when you need a quick exit quickly. Amin Rajan gives us a forceful statement of this point inspired by the “current travails at Woodford Asset Management.”Read More

Steamrollers, Geniuses and Market Crashes

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

Goldman Sachs Equity Hedge Fund Report Deep Dives 13Fs

Oct 7th, 2018 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Equity Hedge Funds, Newly Added, Alpha Strategies, Risk management, The A.I. Industry, Risk Management Strategies & Processes, Hedge Funds, Structure of the Hedge Funds Industry

Working from a database drawn from 13F filings, authors of a new report from Goldman Sachs Asset Management maintain: (1) hedge funds tend to overweight equities in three markets: information technology, consumer discretionary, healthcare; (2) quarter-on-quarter turnover for equity hedge funds’ portfolios is limited; and (3) a long-only sample portfolioRead More

Modi Operandi

Oct 1st, 2018 | Filed under: Newly Added, The Global Economy & Currencies, What about beta?, Emerging markets, The A.I. Industry, Frontier markets, Macroeconomics

By Bill Kelly, CEO, CAIA Association What’s your liquidity M.O.? If you are less than certain, it is time to look east toward the country of India and the land of Modi. After all, when 1.3 billion people cough there is a decent chance the rest of the world justRead More

Liquidity: The Taxi-onomy of Supply and Demand 

Aug 13th, 2018 | Filed under: Newly Added, The Global Economy & Currencies, What about beta?, Macroeconomics

By Bill Kelly, CEO, CAIA Association The CAIA Association has partnered with AIMA to develop a series of educational papers designed to equip trustees and other fiduciaries with the proper tools to assist them in their risk oversight responsibilities. The third installment covered the use and deployment of leverage in alternative funds and we are now putting theRead More

Improving the Health of Healthcare Endowments

Feb 24th, 2013 | Filed under: Institutional Investing, Alpha Strategies, Asset allocation

The obvious reason for the allocation preferences of healthcare endowments is that they believe they need to remain very liquid. Jarvis, in this white paper, points out that the liquidity preference comes at a cost in performance. Read More

Hull Warns of HFT Cancellations & the Illusion of Liquidity

Oct 17th, 2012 | Filed under: Algorithmic and high-frequency trading

The real problem behind the 2010 flash crash, Hull says, is that again as in 1987 (in a different way of course) traders were working within a market structure that allowed “the illusion of liquidity” to displace the real thing. He cites an authority, because as he says his firm, Ketchum, likes to stay close to the academic literature.Read More

Wanting to Hedge and Wondering How

Sep 30th, 2012 | Filed under: Hedge Fund Operations and Risk Management, Institutional Investing, Risk management

Institutional investors and consultants are by now very sensitive to the fact of fat tail risk, and are no longer confident that diversification among traditional asset classes is a sufficient approach to the management of this risk. Portfolio changes now underway reflect this heightened sensitivity.Read More

Evolution, Revolutions, and Obligated Liquidity

Sep 5th, 2012 | Filed under: Regulatory

Early in this century the RFQ model, a click-to-trade billboard system, itself became the primary driver of the growing trading volumes in corporate bonds, taking the market right through the crisis of 2008. Perrotta rather puckishly associates the rise of the RFQ with Charles Darwin, contrasting evolution with revolution, visionary re-makings with incremental adaptations.Read More

Alpha Hunters: Craig Donohue on The Secrets of Futures & Options Exchanges

Oct 3rd, 2011 | Filed under: Commodities, Alpha Hunters, Alpha Strategies

The concept underpinning financial exchanges can be traced back through much of human history. In Aristotle's Politics, "...there is the anecdote of Thales and his financial device.... he knew by his skill in the stars while it was yet winter that there would be a great harvest of olives in the coming year; so, having little capital, he gave earnest-money for the use of all the olive-press in Chios and Miletus, which he hired at a low price because no one bid against him. When the harvest-time came, and many wanted them all at once and of a sudden, he let them out at any rate which he pleased, and made a quantity of money..." While technology has moved on, the basic principle of futures and options exchanges remains the same. Participants in the market can take the role of Thales (using their insight to bet on price increases), the olive-press-owners (who hedged that Thales' price for the future was higher than they would otherwise get) or even investors who provide 'earnest money' to Thales (assuming markets will rise) or fund the olive-presses (assuming prices will fall).Read More

Hedge Funds Working to Avoid Dramatic Liquidity Mismatches

Sep 25th, 2011 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Alpha Strategies

There will likely always be at least a simmering tension in the hedge fund industry between the managerial desire for discretion in the use of assets and every investor’s desire to have the option of withdrawing funds as needed. When a manager seeks to offer its investors more liquidity thanRead More