Browsing: Access to Alternatives

Access to Alternatives

The Evolution of Private Equity Fund Value

Jun 17th, 2021 | Filed under: Access to Alternatives, Featured Post, Private Equity, Manager Selection, Newly Added

By Jian Zhang, CFA, Partner, Adams Street Partners Private equity represents an important component of the alternatives allocation for an institutional portfolio. This is primarily due to the fact that private equity is complementary to traditional asset classes and has proven to be accretive to overall returns while offering important diversificationRead More


Liquid Alt Juggernauts: Worth their Salt?

Jun 6th, 2021 | Filed under: Access to Alternatives, Featured Post, Manager Selection, Newly Added, Hedge Funds

By Nicolas Rabener of FactorResearch (@FactorResearch) INTRODUCTION One of the most perplexing questions in the investment industry is why liquid alternatives have not been able to disrupt the hedge fund industry in the same way that ETFs have captured significant market share from mutual funds. Neither hedge funds nor mutualRead More


A Hot Commodity: Systematic Investing in China

Jun 1st, 2021 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, Hedge Funds, Commodities & Natural Resources

By Giuliana Bordigoni, Adrian Chang, Adi Mackic, Sophie Rossini, and Kate Straker Introduction Diversification is the cornerstone of a systematic manager’s strategies: greater diversification means a larger pool from which to capture different return streams. Driven by recent rule changes, China offers access to some of the world’s most liquid markets:Read More


Gump’s Law and the Butterfly Effect

May 6th, 2021 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation, Risk Management

By Alexander Ineichen, CAIA, CFA, FRM At the beginning of 2019, 50 out of 50 economists surveyed by the Wall Street Journal thought that 10-year Treasury yields wouldn’t fall below 2% during the year. They did. Remember: The herd instinct among forecasters makes sheep look like independent thinkers.[1] —Edgar FiedlerRead More


A Letter to the SEC’s New Chairman

May 6th, 2021 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added

Below is an excerpt from CAIA Association’s open letter welcoming the Honorable Gary Gensler as New SEC Chairman. Dear Chairman Gensler, On behalf of the Chartered Alternative Investment Analyst Association (CAIA), we congratulate and welcome you as the newly confirmed Chairman of the SEC. CAIA Association is a global professionalRead More


What About Beta? | Bitcoin and Ethereum Derivatives – A First Step for Institutions?

Mar 23rd, 2021 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, What About Beta?, Commodities & Natural Resources

By Keith Black, PhD, CFA, CAIA, FDP, Managing Director of Content Strategy, CAIA Association In February 2020, IPE asked whether the $200 billion cryptocurrency market was of interest to institutional investors. While the premise was tempting, few institutions made the allocation, due to challenges and uncertainty in custody while questioningRead More


Exploring the Potential of Tokenisation in Alternative Investments

Mar 18th, 2021 | Filed under: Emerging Asset Classes, State of the Industry, Access to Alternatives, Featured Post, Real Estate, Private Equity, Infrastructure, Newly Added

By Joanne Murphy, Managing Director, APAC, CAIA Association and Wu Guowei Jack, CFA, Director, Content APAC, CAIA Association Retail investors increasingly understand the risk profile associated with alternative investments and are interested in actively allocating to them. They are also more willing to lock up their capital for the longerRead More


Reaching for Yield in Decentralized Finance

Feb 28th, 2021 | Filed under: Access to Alternatives, Featured Post, Newly Added

By Keith Black, PhD, CFA, CAIA, FDP, Managing Director, Content Strategy, CAIA Association With junk bonds yielding less than 4% and sovereign debt ranging in yields from negative to 2%, investors have been settling for meager yields in bank deposits and the bond market. The revolution in decentralized finance (DeFi)Read More


Hedging Your Bets on Cryptocurrencies

Feb 14th, 2021 | Filed under: Emerging Asset Classes, Access to Alternatives, Featured Post, Manager Selection, Newly Added

What is the most effective proxy-hedging instrument for the Bitcoin/USD market? A recent study by Dominique Guegan, affiliated with Université Paris, Panthéon-Sorbonne, and two other scholars tackles this question. The study reaches no definitive conclusion, except the negative one that there is no way Bitcoin can be “fully hedged becauseRead More


Keeping Digital Assets Stable with Stablecoins

Jan 28th, 2021 | Filed under: Access to Alternatives, Featured Post, Newly Added, Asset Allocation

By Andrew Keenan, CAIA, CFA, CBP, Assistant Vice President at Credit Suisse INTRODUCTION The recent stratospheric rise of bitcoin and its compatriot altcoins has generated both intrigue and despair as a handful of big-name digital assets reached new apogees in 2021 with respect to price and market capitalization. In theRead More


What is DeFi?

Jan 19th, 2021 | Filed under: Emerging Asset Classes, State of the Industry, Access to Alternatives, Featured Post, Newly Added, Hedge Funds

By Dan Eyre You may have heard about tech’s newest portmanteau in the last few months: DeFi. This is due to the meteoric rise in value of the related assets. This post will attempt to explain what DeFi is, and what the medium- to long-term impact will be. To understandRead More


Why STOs are Not ICOs

Dec 27th, 2020 | Filed under: Emerging Asset Classes, State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation

Security token offerings are not initial coin offerings. Three scholars affiliated with Erasmus University in Rotterdam explain the difference between the STO and the ICO markets in a new paper, contending that getting the distinction right is “crucial for the study of entrepreneurial finance.” The paper also sheds light onRead More


Starting Early: The Growing Need for Financial Literacy in the United States

Nov 22nd, 2020 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation

Dr. Greg Filbeck, CFA, FRM, CAIA, CIPM, PRM Investors are increasingly looking toward the private markets as an output for their investment dollars to increase risk-adjusted performance. Historically, such direct investment required an investor to qualify as an accredited investor. Recently, guidelines to qualify as an accredited investor have broadenedRead More


Cryptocurrencies: Asset Class or Something Else?

Oct 22nd, 2020 | Filed under: Emerging Asset Classes, State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation

By Daniele Bianchi, PhD With the rising prices of Bitcoin and public awareness on blockchain, investors have drawn their attention to cryptocurrency markets, driven by the promise of significant returns compared to the flat or negative yields in more traditional asset classes. But how should investors examine cryptocurrencies in theRead More


AI, What Have You Done for Me Lately?

Sep 10th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation, Hedge Funds

By Nicolas Rabener of FactorResearch (@FactorResearch) INVESTING IN AI VERSUS AI INVESTING “AI will probably most likely lead to the end of the world, but in the meantime, there’ll be great companies.” – Sam Altman If investors are looking for that one great AI company that will also end theRead More


Humans are Not Obsolete: We Bring the Razor

Sep 9th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Newly Added

Artificial intelligence, understood in a broad sense to include Big Data and machine learning, is a vast as-yet unplumbed disruption for portfolio management and trading as for so much else. People are still trying to get a handle on it. These are fields in which there is a great dealRead More


Regulatory Bread and Circuses 

Aug 31st, 2020 | Filed under: State of the Industry, Access to Alternatives, Newly Added, Asset Allocation, What About Beta?

By Bill Kelly, CAIA Association CEO Pictured above is the bust and the borrowed line of Juvenal, a Roman poet from the late first century. His cynical reference to bread and circuses was simply to say: feed and entertain the masses and they will forget what they wanted in the first place. The announcement this week from the SEC regarding their final ruling on amendments to the definition ofRead More


IS DOWNSIDE RISK PRICED IN CRYPTOCURRENCY MARKET?

Aug 23rd, 2020 | Filed under: Emerging Asset Classes, Access to Alternatives, Featured Post, Newly Added, Asset Allocation, Risk Management

By Victoria Dobrynskaya, PhD, associate professor of Finance at National Research University Higher School of Economics Looking at the whole cryptocurrency market through the prism of standard multi-factor asset-pricing models reveals that there is a significant heterogeneity in the exposure to the downside market risk across coins, and that aRead More


Do You Know Your ABZ’s?

Aug 10th, 2020 | Filed under: State of the Industry, Access to Alternatives, Newly Added, Asset Allocation, What About Beta?

By Bill Kelly, CEO, CAIA Association Perhaps the most prescient definition of alpha is simply undiscovered beta, and if you look at this idea through the quinquagenarian endowment model, you might just see the point. In the good old days, investment performance and alpha were one in the same. Along cameRead More


Will the DOL Decision on Private Equity Impact the Democratization of Alternative Investments?

Aug 4th, 2020 | Filed under: Access to Alternatives, Featured Post, Private Equity, Newly Added, Asset Allocation

By Rashad Kurbanov, CEO & Co-Founder at iownit capital and markets Alternative investments have been around for decades and have been a part of institutional investment portfolios for the majority of the time. Institutional investors have increasingly allocated their investment capital to these investments with an expectation that they willRead More


Transparency…Democracy…Liquidity

Aug 2nd, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Newly Added

The structure of financial markets has changed substantially since the 2014 publication of Michael Lewis’ Flash Boys. Much that was shocking and new then is now taken for granted. Also, the world of investments is in a sense more democratic now, with Robinhood transforming the model of retail investing, andRead More


Understanding the Limitations of Liquid Alternatives

Jul 30th, 2020 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation, Hedge Funds

By Shana Sissel, CAIA, Spotlight Asset Group More than a decade ago the world of alternative investments witnessed hedge-fund-inspired Investment Act of 1940 (40 Act) funds appear on the scene. Much like their private alternative counterparts, liquid alternatives offer valuable diversification benefits within traditional portfolios, but it’s important to keepRead More


Technology: Aiding and Abetting the Democratization of Alternative Investments

Jul 14th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Private Equity, Newly Added, Hedge Funds

A recent working paper for the European Corporate Governance Institute maintains that technology has the potential to make hedge funds and private equity more accessible to the retail investor. The paper, by Omololu Bajulaiye of Tilburg University, along with some other scholars begins with the non-controversial proposition that venture capital,Read More


Changes are coming

Jul 12th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Newly Added

This article was co-authored by Dr Mehrzad Mahdavi and Hossein Kazemi, Phd, CFA from FDP Institute, and William J. Kelly from CAIA Association Digital transformation, with artificial intelligence and machine learning technologies at its core, has created unprecedented challenges and opportunities across all industries.  The financial sector will be profoundly affected as demonstrated by numerous use casesRead More


FINANCIAL RETURNS IN REWARD-BASED CROWDFUNDING

Jul 5th, 2020 | Filed under: Emerging Asset Classes, State of the Industry, Access to Alternatives, Featured Post, Private Equity, Newly Added

By Victoria Dobrynskaya, PhD, associate professor of Finance at National Research University Higher School of Economics Investments in reward-based crowdfunding campaigns give backers a variety of benefits, such as enjoyment in participating in a creation of a new product, being a part of a similar-minded community, altruistic pleasure of helpingRead More


The Allusivity Premium

Jun 22nd, 2020 | Filed under: State of the Industry, Access to Alternatives, Newly Added, Asset Allocation, What About Beta?

By Bill Kelly, CEO, CAIA Association Since this What About Beta column started about two years and almost 75 entries ago, the goal has always been to take a CAIA article, a relevant news story, or an industry trend and amplify it, replete with an occasional catchy title, and maybeRead More


Pursuing Diversification with Cryptocurrencies

Jun 18th, 2020 | Filed under: Emerging Asset Classes, State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation

By Andrew Keenan, CAIA, CFA, CBP, Assistant Vice President – Valuation Risk and Control at Credit Suisse Overview The recent release of CAIA Association’s seminal report “The Next Decade of Alternative Investments: From Adolescence to Responsible Citizenship” underscored four key tenets for the investment industry to adhere to and emphasizeRead More


A Target Date for Target Dates

Jun 8th, 2020 | Filed under: State of the Industry, Access to Alternatives, Private Equity, Manager Selection, Newly Added, Asset Allocation, What About Beta?

By Aaron Filbeck, CAIA, CFA, CIPM | Associate Director, Content Development at CAIA Association While every retirement plan participant has unique life and planning circumstances, they generally (and almost evenly) split into two broad categories regarding investment philosophies: the do-it-yourself crowd and the do-it-for-me crowd. The do-it-yourself crowd typically followsRead More


ETFs, Systemic Risks, and a Real-Time Test

May 5th, 2020 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation

ETFs are one of the routes by which once alternative and elite-access-only strategies have become democratized or gone retail. As a result of this trend, we have synthetic ETFs, smart beta ETFs, leveraged ETFs, and inverse ETFs. A recent study study provides some reassurance about concerns that have motivated kickbackRead More


Peeling Back the Wrapper of Hedge Fund Strategies

Apr 13th, 2020 | Filed under: State of the Industry, Access to Alternatives, Newly Added, Asset Allocation, Risk Management, Hedge Funds

By Aaron Filbeck, CAIA, CFA, CIPM, Associate Director, Content Development at CAIA Association During CAIA Association’s most recent Virtual Chapter event, Keith and I (virtually) sat down with Chris Tidmore, CFA, CPA at The Vanguard Group to discuss Vanguard’s recent whitepaper, “The Wrapper Matters: Comparing Liquid Alternatives to Hedge Funds”Read More


Where has all the diversification gone?

Apr 7th, 2020 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation

By Beth Anne Byrne and Kara O’Halloran, FS Investments Warren Buffett’s famous quote reads “You only learn who has been swimming naked when the tide goes out”. The tide is most certainly out now, and many portfolios have been exposed. The historic bull market has ended, and with it theRead More


Using Alternative Data and Machine Learning in Alternative Asset Classes

Mar 30th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Newly Added, Risk Management

Keith Black, PhD, CFA, CAIA, FDP, Managing Director of Content Strategy, CAIA Association Michael Oliver Weinberg and Peter Strikwerda work at the Dutch pension fund APG and serve as the head of hedge funds and alternative alpha and the global head of digital and innovation, respectively. CAIA Association and FDPRead More


ESG ETFs: A Warning About Opacity

Mar 15th, 2020 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation, ESG

A recent paper by two legal scholars warns of the absence of transparency, of the opacity, that investors may face in ESG funds and ESG exchange-traded funds. “Buyer Beware: Variation and Opacity in ESG ad ESG Index Funds,” is the work of Dana Brackman Reiser and Anne M. Tucker, whoRead More


3 Threats to Hedge Funds

Mar 8th, 2020 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation, Hedge Funds

A recent paper by a scholar at Tilburg University and a market participant at Robeco outlines the difficulties that the hedge fund industry has faced over the last decade. These problems arose, at least in part, from the democratization of alternative investing. There are three important challenges to the hedgeRead More


Are the Robots Really Taking Over?

Mar 5th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Newly Added, Asset Allocation, Hedge Funds

By Aaron Filbeck, CFA, CAIA, CIPM, Associate Director, Content Development at CAIA Association Excerpted from the Alternative Investment Analyst Review, Volume 8, Issue 3 The Alternative Investment Analyst Review is the official publication of the CAIA Association.  Access to the most current issue is an exclusive benefit of CAIA Membership whileRead More


ESG vs Low-Carbon Investing

Mar 1st, 2020 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation, ESG

By Nicolas Rabener of FactorResearch @FactorResearch INTRODUCTION Investors seeking exposure to global equities with a low carbon footprint could consider the iShares MSCI ACWI Low Carbon ETF (CRBN) or SPDR MSCI ACWI Low Carbon ETF (LOWC). CRBN has $500 million of assets under management, compared with $90 million for LOWC.Read More


Wall Street Tackles Sustainable Development Goals

Feb 25th, 2020 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, ESG

In 2015 the United Nations defined 17 Sustainable Development Goals [no poverty, no hunger, health & well-being, etc.] along with 169 targets that were devised to allow for quantitative measurement of progress. It also set 2030 as the bull’s eye for the attainment of the goals. Since governments alone areRead More


Avoiding Silver Bullets

Feb 24th, 2020 | Filed under: State of the Industry, Access to Alternatives, Newly Added, Asset Allocation, What About Beta?, Hedge Funds

By Aaron Filbeck, CFA, CAIA, CIPM – Associate Director, Content Development at CAIA Association Whether it’s that some retail versions of alternative investments have not lived up to their private counterparts, or that retail investors may be last in the buffet line for private placements, there are several arguments againstRead More


Alpha Comes in Waves

Feb 20th, 2020 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation, Hedge Funds, Commodities & Natural Resources

The brief history of replication funds may already be divided into three waves, the third of which is still in formation. The first wave was about democratization: putting hedge fund strategies in the hands of people who cannot meet the accreditation requirements to invest in hedge funds proper, or ofRead More


Making Your Portfolio About #Goals

Feb 13th, 2020 | Filed under: State of the Industry, Access to Alternatives, Real Estate, Manager Selection, Newly Added, Asset Allocation, Hedge Funds, Commodities & Natural Resources

By Aaron Filbeck, CFA, CAIA, CIPM, Associate Director, Content Development at CAIA Association Central Issue of the Paper If you’re a social media junkie, you have probably seen “#goals” in your timeline. In most cases, the hashtag is referring to an attractive couple or an aesthetically pleasing plate of food.Read More


The Case for ESG as a Performance Additive

Feb 4th, 2020 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, ESG

Sustainability-sensitive investing has a net positive impact on performance, according to a paper released by Robeco. According to the paper written by Chris Berkouwer, a Robeco equity analyst, ESG was responsible for 20% of the outperformance of a Robeco fund over a period of three years. His findings are presentedRead More


Alternative Data: A Road to Alpha

Feb 2nd, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Real Estate, Private Equity, Newly Added, Asset Allocation, Hedge Funds

Investment management firms are increasingly hard-pressed to hedge away risks, increase alpha, and lower costs: a daunting agenda. One way of going about that is by knowing what is going on in the underlying markets more quickly than the competitors and counterparties do.  To that end: alternative data. Investment firms,Read More


Leery Funk’s Open Letter to Sovereign Leaders

Jan 27th, 2020 | Filed under: State of the Industry, Access to Alternatives, Private Equity, Manager Selection, Newly Added, Asset Allocation, What About Beta?, ESG

By Bill Kelly, CAIA Association CEO In the interest of brevity, I am going to skip the salutation and get right to the heart of the matter. As my name implies, I am Leery of the lofty promises that depend on solving our long-term problems and I do remain inRead More


False Positives and Machine Learning

Jan 23rd, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Newly Added, Risk Management, Hedge Funds

There is a high rate of failure among quant funds. These include smart beta, factor investing, statistical arbitrage, and CTAs. Such false positive strategies are a widespread industry problem. Since psychiatrists have long traded on the ability of the human mind to find an elaborate narrative in a random inkRead More


Hope May Not Be a Strategy…But Neither is a 60/40

Jan 21st, 2020 | Filed under: State of the Industry, Access to Alternatives, Manager Selection, Newly Added, Asset Allocation, What About Beta?, Risk Management

By Guest Contributor Aaron Filbeck, CFA, CAIA, CIPM, Associate Director, Content Development The death of the 60/40 may be a welcome change for multi-asset investors who understand that exposure to risk premia is perhaps a far better long-term investment strategy. Diversification remains an important facet of asset allocation, but weRead More


Simpler Rules for Commodity Pools

Jan 9th, 2020 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, Commodities & Natural Resources

The Commodity Futures Trading Commission has changed the rules for the managers of commodity pools. The new regulations, approved in November and published in the Federal Register for Dec. 10, take effect on Thursday, January 9, 2020. Some key points about these changes: They have codified Family Office No-Action Letters,Read More


The Dog Days of… print(“Season is”,season)

Jan 6th, 2020 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Manager Selection, Asset Allocation, What About Beta?

By Bill Kelly, CEO, CAIA Association As a global organization, it is pleasing to know there is always a CAIA Association Member, somewhere in the world, enjoying the dog days of summer. Although we can’t get Portfolio Management Research to recognize the Southern Hemisphere of seasons on the cover ofRead More


Start Your Algorithms: Speed is Good Again, or is it?

Dec 30th, 2019 | Filed under: Data Science & AI, State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation, Hedge Funds

Until the final days of 2019, it has been a quiet year for high-frequency trading-related news. The whole concept of a trade executed in nanoseconds, and the related concept of a trading program managed with only sporadic human intervention or oversight, have all faded into background assumptions. What remains isRead More


How to Evaluate Smart Beta ETFs

Dec 8th, 2019 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation

By Nicolas Rabener of FactorResearch (@FactorResearch) Beta is like ice cream and comes in many flavors. Broadly we can categorize it into the following four types: Plain beta: Market capitalization-weighted benchmark indices like the S&P 500 or FTSE 100. Smart beta: Indices with tilts to factors backed by academic andRead More


Setting The Next Stage in Cryptocurrencies

Dec 1st, 2019 | Filed under: Emerging Asset Classes, State of the Industry, Access to Alternatives, Featured Post, Newly Added, Asset Allocation

Telegram Open Network (TON) is a blockchain project supported by a native utility token called the Gram, created by Pavel and Nikolai Durov, who were behind the Telegram messaging app. TON now faces an existential regulatory threat. The Durovs created TON in response to what they saw as the limitsRead More