Browsing: Manager Selection

Manager Selection

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


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


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


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


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


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


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


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 Often-Forgotten Art and Science of Manager Due Diligence

Jan 10th, 2021 | Filed under: Featured Post, Manager Selection, Newly Added, Risk Management

By Shana Sissel, CAIA – Chief Investment Officer of Spotlight Asset Group For almost two decades I have worked in roles that were heavily focused on investment manager due diligence across asset classes and legal structures. I began my career in due diligence-focused on the world of hedge funds. HedgeRead More


What About Beta? | Save (Us All) for Retirement

Nov 15th, 2020 | Filed under: Manager Selection, Newly Added, Asset Allocation, What About Beta?

By Aaron Filbeck, CFA, CAIA, CIPM We have not been shy in our assessment of the current state of retirement. As we know, defined benefit plans face a tough road ahead as lofty actuarial assumptions have barely budged and regular distributions are hardly being backfilled with contributions. But what aboutRead More


Why Alternative Investment Operations Still Matter

Oct 20th, 2020 | Filed under: Featured Post, Private Equity, Manager Selection, Newly Added, Risk Management, Hedge Funds

By Jason Scharfman Esq., CFE, CRISC, CAMS, CAIA Managing Partner, Corgentum Consulting As an operational due diligence (ODD) professional who performs ODD reviews of alternative investment managers on behalf of institutional investors and family offices, I have noticed a recent increase not only in the number of ODD reviews investorsRead More


India: An Alternative Investment Industry Growth Story

Sep 27th, 2020 | Filed under: State of the Industry, Featured Post, Real Estate, Manager Selection, Newly Added, Hedge Funds

By Shreekant Daga, CAIA, CFA, FRM – Associate Director of Industry Relations, India at CAIA Association & Guowei Jack Wu, CFA – Director of Content, APAC at CAIA Association Through August-September 2020, CAIA Association hosted a 10-part educational webinar series titled 10 Lessons in Finance. The event brought together academics fromRead More


Size, Expertise, and What Really Matters in Fund Selection

Sep 15th, 2020 | Filed under: State of the Industry, Manager Selection, Newly Added

Lydia Ofori, CFA, CAIA Chief Executive Officer at Victoria Lion Partners Private assets have come of age, in part thanks to an over stretched liquid market which has led to little or no room for alpha generation, and also due to a growing familiarity of the concept of private ownershipRead More


What If Bob Ross Was a Portfolio Manager?

Sep 14th, 2020 | Filed under: Data Science & AI, State of the Industry, Manager Selection, Newly Added, What About Beta?, Hedge Funds

By Aaron Filbeck, CAIA, CFA, CIPM Associate Director, Content Development at CAIA Association If you’ve ever watched an old Bob Ross video, you’ve probably felt a combination of relaxation and, in many cases, exasperation… “how does he do that so effortlessly?!” While there are rarely “happy accidents” in investing, IRead More


Is the US Stock Market Overvalued? A Back-of-the-Envelope Calculation

Aug 16th, 2020 | Filed under: Featured Post, Manager Selection, Newly Added, Asset Allocation

By Hossein Kazemi, The CAIA Association & The Isenberg School of Management In recent weeks, hundreds of research reports and many more blogs and commentaries have discussed the current valuation of the US stock market.  With the economy in a recession and corporate profits and GDP down by double digits,Read More


An ‘Alternative’ Safe-Haven

Jul 26th, 2020 | Filed under: Featured Post, Manager Selection, Newly Added, Asset Allocation, Risk Management

By Karl Rogers, ACE Capital Investments Abstract: The sovereign bond market has traditionally been a widely used tool for portfolio construction given its dual characteristics of returning a real yield with a negative correlation to equity markets – providing both a real return expectancy and portfolio protection. Given the zero-lower-boundRead 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


Time-varying Equity Volatility Markedly Affects Hedge Fund Performance

May 19th, 2020 | Filed under: Featured Post, Manager Selection, Newly Added, Risk Management, Hedge Funds

By Masao Matsuda, CAIA, FRM, Founder, Crossgates Investment and Risk Management One would think hedge funds can weather market gyrations better than long-only equity investments as hedge funds have greater flexibility in determining the levels of market exposure.  However, while some individual hedge funds may have been successful in adverse marketRead More


Real Assets ‘Inception:’ Diversification within Diversification

Feb 27th, 2020 | Filed under: State of the Industry, Real Estate, Manager Selection, Newly Added, Asset Allocation, Risk Management, Commodities & Natural Resources

By Aaron Filbeck, CFA, CAIA, CIPM, Associate Director, Content Development at CAIA Association Excerpted from the Alternative Investment Analyst Review, Volume 8, Issue 1 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 MembershipRead More


If You Don’t Want ‘Bragging Rights’ You Can Get Alpha Done

Feb 22nd, 2020 | Filed under: State of the Industry, Featured Post, Private Equity, Manager Selection

The quarterly investor report of VCapital Management Company looks at the opportunities for attractive returns for investors regardless of the cloudy economic conditions of 2020. It argues that alpha is to be found in the Midwest, in early-stage investing, and in two industries: healthcare/biomedical and intellectual property. Though the reportRead More


The Future of Hedge Fund Fees

Feb 18th, 2020 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

We can, in a speculative mood, ask ourselves, “Will hedge fund fees continue to drop or have they reached an equilibrium after the decline of recent years?” But it would be better to ask instead “whose fees?” For talk of the “average” fee hides the fact that discounting for volume,Read 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


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


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


An Alternative View of Manager Selection Risk

Jan 16th, 2020 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Asset Allocation, Risk Management, Hedge Funds

By Aaron Filbeck, CFA, CAIA, CIPM & Hossein Kazemi, PhD, CFA, CAIA Association & CISDM This is a summary of the editor’s letter originally published in the Volume 8, Issue 4 of the Alternative Investment Analyst Review, a journal published by CAIA Association. The Problem with Studies Many studies onRead 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


Ebenezer Scrooge: An Alternative View

Dec 23rd, 2019 | Filed under: State of the Industry, Manager Selection, Newly Added, What About Beta?, ESG, Hedge Funds

By Bill Kelly, CEO, CAIA Association Ebenezer Scrooge was not exactly a cuddly CEO. The way he treated poor Bob Cratchit alone would not have exactly put Scrooge & Marley Ltd. in the top quartile of the Sustainalytics’ ESG Risk Ratings, as he routinely gutted any notion of social responsibility.Read More


Investment Management: Time for New Leaders and Exiting Comfort Zones

Dec 10th, 2019 | Filed under: State of the Industry, Featured Post, Private Equity, Manager Selection, Newly Added, Asset Allocation, ESG, Hedge Funds

Disruption is the trend of the moment in many industries and the investment world is no exception. Deloitte Insights has just posted an article that takes a comprehensive look at the investment world today, traditional and alternative. Its theme is that this world is in search of new leadership andRead More


Requiem for a Heavyweight

Dec 2nd, 2019 | Filed under: Manager Selection, Newly Added, What About Beta?, Risk Management

By Bill Kelly, CAIA Association CEO A requiem is a solemn chant for the repose of the dead. Chant-worthiness when it comes to the Enron Corporation is still subject to much debate depending, of course, upon which side of that trade you were on as the company slipped into bankruptcyRead More


Hedge Fund Flows Fall Flat in October

Nov 24th, 2019 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

The Eurekahedge Hedge Fund Index was up 0.31% in October. However, it doesn’t measure up to the market next to the MSCI ACWI (Local), which ended October up 1.93%. Eurekahedge’s latest monthly report observes that US-China trade talks resumed, and this led to a certain tentative optimism. Since those areRead More


Democratization Without Education

Nov 18th, 2019 | Filed under: State of the Industry, Access to Alternatives, Private Equity, Manager Selection, Newly Added, Asset Allocation, What About Beta?

By Bill Kelly, CAIA Association CEO The American history buffs out there will know that we are just a few short weeks away from the 246th anniversary of the Boston Tea Party. Back in 1773, the British government was deep in debt and decided the very best course was toRead More


Improve Private Funds, Don’t Do Away with Them

Oct 22nd, 2019 | Filed under: State of the Industry, Private Equity, Manager Selection, Private Debt, Newly Added, Asset Allocation

By John L. Bowman, CFA This editorial first appeared on Sept. 18 in Crain’s Pensions & Investments online edition. It’s open season on private equity in the Democratic presidential debates. Senators Elizabeth Warren and Bernie Sanders and others have made attacking “Wall Street” a major plank in their campaign platforms.Read More


Global Hedge Fund Assets Shrink

Oct 20th, 2019 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

According to the latest report from Eurekahedge, the world’s hedge funds recorded a net growth of $3.4 billion due to performance in September 2019. On the other hand, September also saw large net outflows of $6.2 billion. Assets at the end of the month were down 0.12%.  Looking at fundsRead More


New Study Shows Hedge Fund Investors are Quick Learners

Sep 3rd, 2019 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

A recent study by two scholars at the University of California Irvine asks how quickly investors learn about the skills of their asset managers, including their hedge fund managers. Christopher Schwarz and Zheng Sun, both associate professors of finance at The Paul Merage School of Business at UC Irvine, hadRead More


How Endowments and Foundations Look at Hedge Funds

Aug 8th, 2019 | Filed under: State of the Industry, Featured Post, Private Equity, Manager Selection, Private Debt, Newly Added, Hedge Funds

Cowen’s Capital Introduction Group has compiled information on what the endowment and foundation community is thinking about hedge funds and how best to invest in them. The Cowen paper on the subject begins with the observation, drawn from Preqin, that at present US-based E&Fs with more than $750 million inRead More


Hedge Fund Performance and Fees: Who is Earning Their Keep?

Jul 30th, 2019 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

The Eurekahedge Hedge Fund Index was up in June, wrapping up a very strong first half of the year for the hedge fund industry. The monthly increase of 1.83% reverses the down month of May, which in turn was a reversal of the strength of the first four months, withRead More


The Audacity of Opacity

Jul 15th, 2019 | Filed under: State of the Industry, Private Equity, Manager Selection, Newly Added, Asset Allocation, What About Beta?, Hedge Funds

By Bill Kelly, CEO, CAIA Association Why are we still talking about this? No, it’s not the central bankers and their insatiable easing tendencies, trade wars with China, or even the Women’s World Cup football match (sorry Netherlands!). These stories all make great headlines, drive news ratings, generate tickertape parades,Read More


Net Performance Reporting: Not Just Arithmetic

Jul 2nd, 2019 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Risk Management, Hedge Funds

Why can’t a fund manager simply subtract all fees and expenses from gross returns and present the arithmetical result to existing or potential investors? In a newly released paper, Donald Steinbrugge, the founder and CEO of Agecroft Partners, discusses how hedge funds calculate and present their net performance, and theRead More


Hedge Fund Index Backslides in May; Remains in Positive Territory

Jun 25th, 2019 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds, Commodities & Natural Resources

Red ink spoiled an otherwise positive 2019 for he Eurekahedge Hedge Fund Index. The decline of 0.71% leaves the year-to-date performance still well up, at +4.32%. Approximately 41.6% of the funds Eurekahedge tracks were in the black for the month. And 15% have generated double-digit gains year-to-date. North America-mandated hedgeRead More


Fixing the Sharpe Ratio: A Machine Learning Approach

Jun 16th, 2019 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Risk Management, Hedge Funds

The Sharpe ratio has long served as a simple but important item in the due diligence tool kit. Formulated by William F. Sharpe in 1966 and first called the “reward to variability” ratio, the number arises from an investment’s rate of return minus the risk-free rate divided by the standardRead More


Advising the Ultra-Wealthy: The State of the Industry

Jun 12th, 2019 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added

The Family Office Exchange (FOX) has released a report on the state of the ultra-wealthy advisory business. The report, based on a survey and interviews, draws three broad conclusions: first, the business is in a healthy condition; second, its value proposition is in transition, away from asset-based and toward retainer-basedRead More


Accommodating Ambiguity Aversion in Portfolio Modeling

May 14th, 2019 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Risk Management

By standard definition, “ambiguity aversion” is the preference for known risks over unknown risks, the known unknowns over the unknown unknowns. A recent paper discusses the portfolio-level consequences of this aversion. The paper, written by Valery Polkovnichenko and Hui (Grace) Wang, explains that for an ambiguity-neutral investor, “adding active portfolio withRead More


Hedge Funds: Observing the Unobserved Performance

Mar 14th, 2019 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Asset Allocation, Hedge Funds

Two different strands of scholarly research into hedge fund performance produce markedly different conclusions. There is the returns-based approach, which finds that the average hedge fund manager does better than the market portfolio, net of fees. But there is also a holdings-based approach, which looks at the performance of theRead More


Hedge Funds Stronger in January, Thanks to The Fed

Mar 3rd, 2019 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

Risk-on sentiment returned in January, with good news on trade talks and with the Federal Reserve in the United States putting some distance between itself and its 2018 hard-money stance (the Fed started saying in January that it would be “patient” about selling off-balance sheet assets). Globally, hedge funds grewRead More