Browsing: Featured Post

Featured Post

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


Time Versus Volatility in a CDI Approach

Jun 15th, 2021 | Filed under: Featured Post, Manager Selection, Newly Added, Asset Allocation

By Russell Kamp, Managing Director at Ryan ALM There is a lot of volatility in a normal asset allocation in short time frames. We’ve seen this unfold dramatically in a number of cases during the last couple of decades. To reduce this volatility, I often guide our pension clients toRead More


Picking Top Performers: Does History Tell Us the Future?

Jun 14th, 2021 | Filed under: Featured Post, Manager Selection, Newly Added

By Karl Rogers, Managing Partner and Co-Founder of Athlon Family Office Over the past 20 years, allocating to a portfolio of recent top-performing managers does produce persistently better absolute returns than the market and its peers, while allocating to a portfolio of the recent worst-performing managers produces better returns than theRead More


Traditional Uses of Commodities in a Diversified Portfolio

Jun 11th, 2021 | Filed under: Featured Post, Newly Added, Commodities & Natural Resources

By Fiona Boal, Head of Commodities & Real Assets, and Jim Wiederhold, Associate Director, Commodities & Real Assets, S&P Dow Jones Indices Commodities may be the building blocks of the real economy, but they have long been viewed as the poor cousin in the investment universe, and often for good reason. UnlikeRead More


Identifying Red Flags in Private Markets Due Diligence

Jun 8th, 2021 | Filed under: Featured Post, Private Equity, Manager Selection, Newly Added

 By Jamie Ebersole, CFA, CFP, CEO, Ebersole Financial, LLC There is no shortage of information out there about due diligence on private assets and managers of private funds. When I started in the business many years ago, I remember receiving a research paper on the topic from Goldman Sachs, whichRead 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


What About Beta? | Learn to Play the Orchestra

Jun 6th, 2021 | Filed under: Featured Post, Manager Selection, Newly Added, Asset Allocation, What About Beta?, Risk Management

By Aaron Filbeck, CFA, CAIA, CIPM, FDP, Director, Global Content Development at CAIA Association Steve Wozniak: “You can’t write code… you’re not an engineer… you’re not a designer… you can’t put a hammer to a nail […] So how come ten times in a day, I read Steve Jobs isRead More


Performance Persistence: Is It There, and Can It Be Exploited?

Jun 3rd, 2021 | Filed under: Featured Post, Private Equity, Manager Selection, Newly Added, Hedge Funds

By Hossein Kazemi, PhD, CFA, Isenberg School of Management and CAIA Association By the end of 2020, only 0.72% of all active US mutual funds had finished in the top quartile every year since 2016. Among mutual funds, mid-cap funds displayed the highest degree of persistence: 1.47% of them haveRead More


Will the 2020 SPAC IPOs Boom Continue?

Jun 2nd, 2021 | Filed under: Featured Post, Private Equity, Newly Added, Hedge Funds

By Wu Guowei Jack, CFA, CAIA, Director, Content APAC, CAIA Association  2020 was a boom year for Special Purpose Acquisition Company (SPAC) listings. An annual total of US$ 83 billion was raised, accounting for 46% of total US IPO proceeds and 55% of the total number of US IPOs. The momentumRead 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


With Tokenization, the Time Has Come for Evergreen Funds

May 27th, 2021 | Filed under: Featured Post, Private Equity, Newly Added

By Richard Johnson, CEO, Texture Capital This post was originally published on Texture Capital’s website on May 5, 2021. Evergreen fund structures for venture capital offer many advantages over more traditional fixed-term structures. As these funds are open ended and have no termination date, they give fund managers more flexibilityRead More


Investing in NFTs: Why It Matters

May 25th, 2021 | Filed under: Emerging Asset Classes, Featured Post, Newly Added

By Evan Cohen, Co-Founder, Vincent As investors increasingly expand their portfolios into the world of digital finance, one theme which continues to draw interest is the development of digitally native goods. These are goods or items that are created and utilized primarily in a digital environment, meaning their primary use caseRead More


What About Beta? | A Canary Conundrum

May 24th, 2021 | Filed under: Featured Post, Manager Selection, Newly Added, What About Beta?, ESG

By Bill Kelly, CEO, CAIA Association Pity the poor misunderstood canary. It was in the early 1900s in Yorkshire when they were first chosen to die on a hill that they would likely have volunteered to die on anyway. It was that important then and even more important today. ItRead More


Ignoring Energy Transition Realities, Part I

May 21st, 2021 | Filed under: Featured Post, Newly Added, ESG, Commodities & Natural Resources

By Goehring & Rozecwajg We are making a terrible mistake when it comes to future energy policies. In previous letters, we have touched upon the challenges of the so-called “energy transition.” Today, we will explain in detail the imminent harm awaiting investors and policy makers who fail to acknowledge certainRead More


Implementing a Data Strategy for Private Markets

May 18th, 2021 | Filed under: Data Science & AI, Featured Post, Newly Added

By Ronan Crosson, CFA, Director, Data Strategy & Analytics at Eagle Alpha For many PE funds there are strong push factors driving the move to alternative data. Historically low-interest rates are pushing more investors to consider PE as a viable investment, but how does a PE firm stand out? To stand outRead More


ESG and the Private Markets

May 16th, 2021 | Filed under: State of the Industry, Featured Post, Private Equity, Newly Added, ESG

This post is an excerpt from the recently published PitchBook Analyst Note: ESG and the Private Markets, written by Hilary Wiek, CFA, CAIA, Lead Analyst, Fund Strategies & Performance. Click here to read the full note. What and how to report Once an investor—be it an LP or a GP—comesRead More


A Comparative Analysis of Chinese Private Debt

May 13th, 2021 | Filed under: Featured Post, Private Debt, Newly Added

This article was originally published by ShoreVest on April 12, 2021. It is a comparative analysis of the risk/return profile of Chinese private debt. The paper addresses competing private credit products, creditor risks, assumptions about credit protections, the size of the market, the lack of competition, and potential fit within aRead More


What About Beta? | The Law of Portfolio Relativity

May 9th, 2021 | Filed under: State of the Industry, Featured Post, Newly Added, What About Beta?

By Aaron Filbeck, CFA, CAIA, CIPM, FDP, Director, Global Content Development at CAIA Association One of my favorite sci-fi movies of all time is Christopher Nolan’s Interstellar. While there so many great elements to the film, including a killer score, one of the most interesting tensions that emerges from theRead 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


Co-Investments: A Sprint or a Marathon?

May 4th, 2021 | Filed under: State of the Industry, Featured Post, Private Equity, Newly Added

By Wu Guowei Jack, CFA, Director, Content APAC, CAIA Association The Continued Growth of Private Equity Global assets under management (AUM) in private equity (PE) and venture capital continue to grow despite the economic slowdown from the COVID-19 pandemic and a slight drop in 2020 fundraising. Preqin reported that PERead More


Analyzing 60/40 Portfolios Without Bonds

May 3rd, 2021 | Filed under: State of the Industry, Featured Post, Newly Added, Asset Allocation, Hedge Funds

By Nicolas Rabener, CAIA, of FactorResearch (@FactorResearch) INTRODUCTION John Maynard Keynes famously asked, “When the facts change, I change my mind—what do you do, sir?” If this question was directed at global pension funds and their fixed income allocation, then the answer would have to be, “Not much.” Their averageRead More


What the OCC’s Letter Means for PASTOs

Apr 29th, 2021 | Filed under: Emerging Asset Classes, State of the Industry, Featured Post, Private Equity, Manager Selection, Newly Added

By Lydia Ofori, CFA, CAIA, Founder and CEO, Hunter Labs Technologies In a recent paper, my colleagues and I discussed the creation of private asset security token offerings (PASTOs), which are essentially frictionless representations of investor interests in private asset portfolios in token form. Such a phenomenon is possible thanksRead More


What About Beta? | Culture Eats Sharpe Ratios for Breakfast

Apr 25th, 2021 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, What About Beta?, Risk Management

By John Bowman, CFA, Senior Managing Director, CAIA Association This article was originally posted on FundFire on March 24, 2021. Alternative fund manager due diligence has an execution problem. The evidence is mounting that investors, managers, and consultants agree the typical fund vetting process overlooks increasingly important qualitative factors thatRead More


Worried About Inflation? Get Real

Apr 23rd, 2021 | Filed under: Featured Post, Newly Added, Asset Allocation, Commodities & Natural Resources

By Keith Black, PhD, CFA, CAIA, FDP, Managing Director, Content Strategy, CAIA Association Last July, we discussed Socially Distanced Inflation with the idea that COVID would have a negative effect on employment and output, which would lead to increased business failures. A record amount of monetary and fiscal stimulus combinedRead More


To SPAC or Not To SPAC

Apr 14th, 2021 | Filed under: Featured Post, Private Equity, Newly Added

A Guide to SPACs for Arbitrageurs, Shareholders, and Private Companies By Keith Black, PhD, CFA, CAIA, Managing Director of Content Strategy, CAIA Association There has been tremendous activity in the SPAC market in 2020 and 2021, a time when more than half of the IPO activity has been attributable to theRead More


Responsible Investment – Are You Ready?

Mar 30th, 2021 | Filed under: Featured Post, Newly Added, ESG, Risk Management

By Maria Long, Content Director, The Standards Board for Alternative Investments (SBAI) Responsible Investment (“RI”), also known as ESG Investing or Sustainable Investing, is a growing area of interest for asset managers, allocators, and regulators. Historically RI was associated with value-based exclusions of specific securities or sectors from a portfolio,Read More


Are Investors Overpaying for Liquidity With Residential MBS Bonds?

Mar 26th, 2021 | Filed under: State of the Industry, Featured Post, Private Debt, Newly Added

By Jan Brzeski, Managing Director and Chief Investment Officer, Arixa Capital Investors are desperate for yield, a fact that is well known by investment professionals everywhere. Yields have trended down steadily for decades, causing Wall Street to look further and further from the mainstream to find new types of loans toRead 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


Alternative Data: The Gateway to Global Markets

Mar 21st, 2021 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added

By Tom Nigro, Head of North America at GTCOM-US The COVID-19 pandemic and its vast impact have pushed businesses in all industries to adapt. When it comes to the investment landscape, we’ve seen an influx of data-driven investors and analysts looking to increase the sheer level of information they’re utilizingRead 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


What Hedge Fund Risk Systems Don’t See

Mar 16th, 2021 | Filed under: Featured Post, Newly Added, Risk Management, Hedge Funds

By Linus Nilsson and Rikard Lundgren Many investors, trading floor managers, fund of fund allocators, and risk managers have experienced unexpectedly large losses that were not predicted by their risk management systems. Seemingly out of the blue, a safe portfolio can generate large losses for reasons that had not beenRead More


Real Estate Debt and Sustainability

Mar 14th, 2021 | Filed under: Featured Post, Real Estate, Infrastructure, Manager Selection, ESG, Commodities & Natural Resources

A new report from two executives at Aviva Investors, the global asset manager that is part of the UK-based Aviva Group, looks at real estate debt as a way to play the transition to a low-emissions or even a no-net-emissions world. One key source of value here is that theRead More


What About Beta? | Breaking the Fourth Wall of ESG

Mar 14th, 2021 | Filed under: Featured Post, Newly Added, What About Beta?, ESG, Risk Management

By Aaron Filbeck, CFA, CAIA, CIPM, FDP, Director of Global Content Development at CAIA Association “In a real magic act, everything is fake.” – Wanda Maximoff, WandaVision (2021) A harmless phrase used in the latest addition to the Marvel Cinematic Universe, WandaVision. The protagonist, Wanda Maximoff, has created a false reality byRead More


Axe Capital and Spartan-Ives: The Impact of Prime Broker Relationships

Mar 11th, 2021 | Filed under: Featured Post, Newly Added, Hedge Funds

By Hossein Kazemi, PhD, CFA, CAIA Association, FDP Institute, and Isenberg School of Management Introduction Bobby Axelrod had a good day on June 10, 2018. On this day, Axe Capital’s manager took the podium in front of a group of institutional and high-net-worth investors to pitch his fund. Thirty minutesRead More


Targeted Strategies for Managing Carbon Risk

Mar 9th, 2021 | Filed under: Featured Post, Newly Added, ESG

“Decarbonizing Everything,” a new study from George Serafeim of Harvard Business School and four executives with State Street Associates looks for ways investors can combine qualitative and quantitative measures to develop targeted strategies that will both manage climate risk and increase risk-adjusted returns. Three Metrics: OC, TVC, AR The paperRead More


European Green Deal: Challenges and Opportunities for Listed Real Estate

Mar 4th, 2021 | Filed under: Featured Post, Real Estate, Newly Added, ESG

By Jana Bour, LL.M., EU Policy Manager at the European Public Real Estate Association (EPRA) With the ‘European Green Deal’ (EGD), as with every growth-oriented policy strategy, come challenges but also opportunities. The European Commission aims to transform our continent to achieve net-zero emissions of greenhouse gases in 2050. WhileRead More


The Art of Due Diligence, Part II: The Good News for Emerging Managers

Mar 2nd, 2021 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Risk Management

By Keith Black, PhD, CFA, CAIA, FDP, Managing Director, Content Strategy, CAIA Association, and Mark S. Rzepczynski, PhD, CEO, AMPHI Research and Trading Managing alternative assets is especially competitive for small and emerging managers. At the end of 2020, HFR data shows that the private hedge fund industry had $3.6Read 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


Do Private Equity Alternative Vehicles Benefit Some LPs More Than Others?

Feb 25th, 2021 | Filed under: Featured Post, Private Equity, Newly Added

By Josh Lerner, Jacob H. Schiff Professor of Investment Banking at the Harvard Business School This post summarizes the following study, which is forthcoming in the Journal of Financial Economics: Lerner, Josh and Mao, Jason and Schoar, Antoinette and Zhang, Nan R., Investing Outside the Box: Evidence from Alternative Vehicles in PrivateRead More


The Art of Due Diligence, Part I: The Story Beyond the Numbers

Feb 25th, 2021 | Filed under: Featured Post, Manager Selection, Newly Added, Risk Management, Hedge Funds

By Keith Black, PhD, CFA, CAIA, FDP, Managing Director, Content Strategy, CAIA Association and Mark S. Rzepczynski, PhD, Founding Partner and CEO, AMPHI Research and Trading Given the reliance on quantitative analysis in asset allocation, some investors may be tempted to continue with a numerical approach when filling their assetRead More


Why Lagging Pensions Should Consider Private Debt

Feb 23rd, 2021 | Filed under: State of the Industry, Featured Post, Private Equity, Private Debt, Newly Added

By Zack Ellison, CFA, CAIA and Guy Pinkman, CPPT Watch our recent webcast series co-hosted with the CAIA SoCAL Chapter to hear more from these authors. Watch the replay of Session 1, featuring Guy Pinkman, or register to join Session 2, featuring Zack Ellison, on March 2 at 9:00 amRead More


Enhancing an Income Portfolio with Factor Design

Feb 21st, 2021 | Filed under: Featured Post, Newly Added, Asset Allocation, Risk Management

By Daniel Fang, CFA, CAIA, Lead Portfolio Manager at Emotomy, and Sabrina Bailey, CEO at Emotomy Interest Rates to Stay Lower for Longer Since the Great Financial Crisis, central banks across all major economies have kept interest rates low to stimulate economic growth (See Exhibit 1). This trajectory took aRead 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


The Rationale for Investing in Exotic Alternative Investments Today

Feb 9th, 2021 | Filed under: State of the Industry, Featured Post, Newly Added, Commodities & Natural Resources

By Kevin R. Mirabile, CPA, DPS  The current rationale for investing in exotic alternative investments is based on a combination of stand-alone returns, risks and portfolio effects. Today, exotic alternative investments offer investors an opportunity to achieve many of the stand-alone and portfolio benefits that hedge funds and other typesRead More


The VIX Dog That Didn’t Bark

Feb 7th, 2021 | Filed under: State of the Industry, Featured Post, Newly Added

By Rick Roche, CAIA In the story, “The Adventure of Silver Blaze”, Sherlock Holmes solves a mystery in part by when no one he’d spoken to during an investigation mentioned that they heard a dog bark the night a famous race horse was stolen and the horse trainer was killedRead More


Improving Time Travel in Long-Term Investing

Feb 4th, 2021 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added

By Ashby Monk and Dane Rook, Stanford Global Projects Center To succeed at investing, you must master time travel.[i] You need to be proficient at beaming yourself into a hypothetical future, and then analyzing the best route to get “there” from the actual “now.” And the route itself is crucial:Read More


Systemic Impact and ESG Investing in Smart Cities

Feb 2nd, 2021 | Filed under: Data Science & AI, State of the Industry, Featured Post, Infrastructure, Newly Added, ESG, Commodities & Natural Resources

What is a smart city? By definition, a smart city is “a city that uses technology and data purposefully to make better decisions and deliver better quality of life.”  Technology is intricately embedded into the everyday life of city dwellers through network devices, applications, and widely distributed usage.  The combinationRead 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


Multi-Strategy Hedge Funds: Equity in a Different Shade?

Jan 26th, 2021 | Filed under: Featured Post, Newly Added, Hedge Funds

By Nicolas Rabener, CAIA, of FactorResearch (@FactorResearch) INTRODUCTION Investing in hedge funds is challenging as both strategies and fund structures are complex. Almost all strategies are cyclical, although not all are on the same cycle. For example, statistical arbitrage tends to perform best when volatility is high, however, that representsRead More