Browsing: Manager Selection

Manager Selection

Waiting for Godot

Feb 25th, 2019 | Filed under: State of the Industry, Manager Selection, Newly Added, Asset Allocation, What About Beta?

By Bill Kelly, CEO, CAIA Association Waiting for Godot is a tragic comedy play by Samuel Beckett which first premiered on stage in Paris in 1953. There is only one scene and two primary characters who seem to know that they must wait for someone named Godot. They don’t knowRead More


The Survey Says… 

Feb 11th, 2019 | Filed under: State of the Industry, Manager Selection, Newly Added, Asset Allocation, What About Beta?, Hedge Funds

By Bill Kelly, CEO, CAIA Association Earlier this year, we surveyed the CAIA Association Membership to ascertain their views on investment-related topics as we step into 2019. We had well over 1,000 responses which, according to the statisticians, puts us in the 95% confidence interval, plus or minus 3%. The respondents’ geographic breakdown tracked the home region of our broader Member base, andRead More


Eurekahedge: The Grinch Stole December’s Returns

Jan 22nd, 2019 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

The Eurekahedge Hedge Fund Index was down for the month of December 1.31%, and that this brought the total decline of 2018 down to 3.85%, according to the January 2019 report. Part of the reason for the bad December numbers was a broad concern about the yield-curve inversion in USRead More


10 Years Later: Reflections on the Madoff Meltdown

Dec 23rd, 2018 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Manager Selection, Newly Added, Asset Allocation, Hedge Funds

It was just about 10 years ago (Dec. 10, 2008) that Bernie Madoff acknowledged to his sons, Mark and Andrew, that he had “absolutely nothing left” of the funds that had been entrusted to him; that the investment fund that bore his name was “just one big lie.” There isRead More


Five-year endowment performance: no bed of roses

Dec 21st, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added

By Charles Skorina Chief investment officers at endowments, foundations, and family offices are the top guns of the institutional investment world.  They have an infinite investment horizon, a global playing field, and can invest in anything anywhere – within the broad policy limits set by their institution. We, and manyRead More


Financialization and the Volatility of Commodity Prices

Dec 20th, 2018 | Filed under: State of the Industry, Manager Selection, Newly Added, Risk Management, Commodities & Natural Resources

A recent article in the Journal of Risk and Financial Management  takes a fresh look at a familiar issue:  whether the development of exchange-traded funds (ETFs) and related instruments tracking the commodities industry (or, in short, the financialization of commodities) has had an impact on the volatility of the pricesRead More


McKinsey on Asia’s Asset Managers

Dec 16th, 2018 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Manager Selection, Newly Added, Asset Allocation

Assets under management for Asia’s managers have ballooned in the last 10 years, with an increase on average of 9% annually. Performance has been such as to encourage inflow. A recent study by McKinsey suggests that the “good times” will “keep rolling.” But it also cautions that the opportunities inRead More


Panayiotis Lambropoulos: The View from a Public Pension Manager’s Office

Nov 11th, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Asset Allocation, Risk Management, Hedge Funds

On Nov. 13, the 24th Annual National Pension and Institutional Investment Summit convenes in Dallas Texas. CAIA is a sponsor of this event. Panayiotis Lambropoulos, portfolio manager of hedge funds at the Employees Retirement System of Texas, will offer his insights at a panel on emerging hedge fund managers. Lambropoulos’Read More


A Preqin Prequel? 

Nov 5th, 2018 | Filed under: State of the Industry, Manager Selection, Newly Added, Asset Allocation, What About Beta?, Commodities & Natural Resources

By Bill Kelly, CEO, CAIA Association In the world of cinema, by most accounts, it is The Godfather Part II that holds the top spot for best movie prequel. Interestingly, by design and title, it is also a sequel. Sequels at the box office are often panned but this production wasRead More


10 Climate Change Actions for Pension Fund Managers

Oct 28th, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, ESG

The International Centre for Pension Management (ICPM) has put out a paper on climate change and on the difference it makes for investments. The issue of climate change has, in recent years, gone from “being considered a niche issue to one of potentially major financial consequences for all investors,” oneRead More


Quantifying High Performance Dispersion Risk in Alternatives

Oct 24th, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Asset Allocation, Risk Management

By Amit Soni, Portfolio Manager, Strategic Asset Allocation, New York Life Investments Lofty valuations in traditional assets have encouraged investors to explore alternatives. Unfortunately, the lack of a holistic investment framework to incorporate alternatives poses a challenge. Traditional risk-return based approaches, alone, over-allocate to alternatives–a result of underestimation of risksRead More


Self-Organizing Maps for Selecting Hedge Funds

Oct 9th, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Asset Allocation, Risk Management, Hedge Funds

A new paper by Claus Huber, of Rodex Risk Advisers, looks at machine learning for risk analysis, working especially from the “self-organizing maps” associated with Finnish Professor Teuvo Kohonen. A SOM is a low-dimensional representation of input space (thinking of it as two dimensional makes the “map” analogy intuitive, andRead More


Cracking the Illiquidity Code

Sep 26th, 2018 | Filed under: State of the Industry, Featured Post, Private Equity, Manager Selection, Newly Added, Risk Management

By Tom Keck, Partner & Head of Research; Lisa Larsson, Vice President, Research Researchers at StepStone Group, a global private markets firm, recently released a white paper that puts the illiquidity of private equity into perspective. A fund’s life they reckon is too coarse a measure; the picture comes into focusRead More


McKinsey Study: Where are the women in financial services?

Sep 9th, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added

A new report from McKinsey looks at the women in the financial services industry in North America, in the expectation that the findings will be pertinent even beyond the expanses of North America, that the insights and implications will “have global relevance.” The research is part of a collaborative effortRead More


Pitchbook 2018 Report: Where are the unicorns?

Sep 4th, 2018 | Filed under: State of the Industry, Featured Post, Private Equity, Manager Selection, Private Debt, Newly Added

PitchBook has posted its 2018 VC Unicorn Report. The introduction explains the meaning of the term. (It has only been in use in its financial sense since 2013, so explanations may still be deemed necessary.) “Unicorn” refers to an entity upon which the private investment markets have bestowed a valuationRead More


Making Sense of Private Credit Funds

Aug 26th, 2018 | Filed under: State of the Industry, Featured Post, Private Equity, Manager Selection, Private Debt, Newly Added

A new study takes what is called a “first look” at the aggregate performance of private credit funds. Using data going back to 2004, the authors (two of whom are affiliated with Adams Street Partners) determine that private credit funds “have performed about as well, or better than, leveraged-loan, high-yield,Read More


Eurekahedge: Hedge Funds Trailing Behind Last Year’s Performance

Aug 19th, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

According to Eurekahedge, with the July numbers on hedge fund performance now available, 8.5% of hedge fund managers have posted double-digit gains in 2018 to date. Most of that gain is focused on those with a long/short equities mandate. That number is quite low. Eurekahedge contrasts it with the firstRead More


Hedge Funds Arms Race for Alpha

Aug 10th, 2018 | Filed under: State of the Industry, Manager Selection, Newly Added, Hedge Funds, Commodities & Natural Resources

By Don Steinbrugge It is no secret that the vast majority of investors, including hedge funds managers, have underperformed market indices over time. However, some managers have distinguished themselves generating very strong risk adjusted returns. Outperforming an index requires an information advantage over what is broadly available in market.  ItRead More


European Private Equity Activity Increases in Q218

Aug 7th, 2018 | Filed under: State of the Industry, Featured Post, Private Equity, Manager Selection, Newly Added

Pitchbook has a new report out about private equity activity in Europe. It indicates that, despite a slow start to the year, PE deal activity picked up notably in the second quarter. Across the continent there were 804 deals 2Q with a total valuation of  €88.5 billion. Deals above the Read More


Asset Management in China: Expect Growth

Jul 8th, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Asset Allocation, What About Beta?

A new study by Casey Quirk looks at asset management in China. It makes a bold claim: that by 2030, asset management strategies broadly defined will account for 10% of total Chinese wealth. That will be a more than doubling of the corresponding number at present: 4%. If China getsRead More


Pension Funds, ‘Tilt,’ and Underperformance

Jul 1st, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Asset Allocation

Christina Atanasova and Gilles Chemla have posted a discussion of pension plans,where holdings show a tilt toward private equity and real estate investments. Atanasova is associate professor of finance, Beedie School of Business,  Simon Fraser University in Burnaby, BC, Canada.  Chemia is professor of financial at Imperial College Business School, London,Read More


Eurekahedge: 2018 YTD Growth Positive but Unimpressive

Jun 24th, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

The newest Eurekahedge report says that total hedge fund assets have grown by $26.4 billion in the year to date (through May). The gain is the result of inflow, not of positive performance. Assets flowing in to the industry’s coffers YTD equal $30 billion, and one gets the net growthRead More


Closing the Gender Gap in Alternative Investments

May 29th, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added

The Emerging Market Private Equity Association (EMPEA) has announced its first initiative aimed at closing the gender gap, which it calls its Gender Parity Acceleration Working Group. EMPEA has 300 member firms, including both general partners and limited parties, who are invested in more than 130 countries around the globeRead More


Operating Expenses, Strategies, and Scale

May 15th, 2018 | Filed under: Featured Post, Manager Selection, Newly Added, Asset Allocation, Hedge Funds

Meketa Investment Group has issued a paper on the state of hedge fund operating expenses, the point of which is to offer actual and potential fund investors and their managers alike a benchmarking tool. By definition operating costs are those costs associated with day-to-day operations and the needs of anRead More


China-US Trade War and Other Worries

Apr 29th, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

The Eurekahedge April 2018 report says that hedge funds were down in the first quarter of the year (-0.13%). This is the industry’s worst performance since Q1 2016. The steepest performance-based losses by regional mandate were those of the North American funds, they lost $1.2 billion. Meanwhile, asset inflows remainedRead More


The Quants, the Algorithms, and the Performance

Mar 18th, 2018 | Filed under: Featured Post, Manager Selection, Newly Added, Asset Allocation, Hedge Funds

A new paper by J.B. Heaton, forthcoming in the Journal of Financial Transformation, offers a skeptical view of the algorithmic trading of securities, its actuality and its potential. Heaton is a lawyer (admitted to the bars of both Illinois and New York) and has a Ph.D. in finance, University ofRead More


The Tipping Point for Alternative Data

Mar 11th, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added

The Deloitte Center for Financial Services has put out a white paper on “Alternative data for investment decisions.” The term “alternative data” as Deloitte uses it refers to any set or sets of data that may be useful for investors but that is outside their traditional/conventional frame of reference.  InRead More


Whence Corporate Social Responsibility?

Mar 4th, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, ESG, Risk Management

A new scholarly paper, forthcoming in the Journal of Financial Economics, delves into the question whether institutional investors are the driving force behind corporate social economy. I.J. Alexander Dyck and three other scholars looked specifically at the environmental and social performance of firms across 41 countries. They found that ownershipRead More


DB: Investors Newly Optimistic About Hedge Funds

Feb 22nd, 2018 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Asset Allocation, Hedge Funds

Deustche Bank recently released its Alternative Investment Survey, the 16th annual.  This year the questionnaires received replies from 436 global hedge fund investors, with assets under management of $2.1 trillion, who shared their insights, sentiments, and allocation plans.  Glenn Bunn, co-head of Prime Finance at DB, said in a statementRead More


Institutional Investors Expect More Vol, Higher Interest Rates: But They Fear Not

Dec 17th, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Asset Allocation

Natixis Investment Managers has released survey data on the mood of institutional investors around the world. Natixis, which has $961 billion in assets under management, polled the decision makers of 500 institutions that together represent more than $19 trillion of assets. Among the takeaways: investors expect more volatility, in bothRead More


PwC Charge: Asset Managers are Digital Tech ‘Laggards’

Nov 30th, 2017 | Filed under: Data Science & AI, State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

A new paper from PricewaterhouseCoopers on the coming transformations in the asset and wealth management industries says that firms in this market must adapt or die. And the adaptation the authors have in mind isn’t just the usual Darwinian metaphor – managers must “become business revolutionaries, even disruptors” in orderRead More


Due Diligence Requires Deep Dives into Data

Nov 7th, 2017 | Filed under: Featured Post, Manager Selection, Newly Added, Risk Management

The data and analysis provider eVestment has issued a new white paper on “enhancing private equity manager selection with deeper data.” PE funds below the top quartile have not materially outperformed the public markets as a matter of history. So for an institutional investor, earning alpha is in large measureRead More


Lazard Research on Smart Beta

Nov 5th, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Asset Allocation, Risk Management

Jason Williams, senior vice president at Lazard Asset Management, has written a white paper on the “six sins of smart beta.” First: what is smart beta? Academic studies indicate anomalies in the markets that somehow don’t get arbitraged away.  These become identified as “factors” and indexes can be designed soRead More


Federal Reserve on Counterparties to the next Lehman Brothers

Nov 2nd, 2017 | Filed under: Featured Post, Manager Selection, Newly Added, Asset Allocation, Risk Management

The Federal Reserve has issued a final rule relating to the qualified financial contracts (QFCs) of global systemically important U.S. banking institutions (GSIBs). Derivatives & Repo Report, a blog maintained by the international law firm Perkins Coie, has done a thorough write-up on the subject, to which the material belowRead More


AIMA’s New Due Diligence Template

Oct 22nd, 2017 | Filed under: Data Science & AI, Featured Post, Manager Selection, Newly Added, Risk Management

It has been 20 years since the Alternative Investment Management Association published its first due diligence questionnaire, a template designed to standardize the diligence process by which investors decide if a particular management is right for them. Now it has published a new questionnaire/template, covering a broader range of entities/strategies.Read More


Outsourced assets under management up 18% year-over-year

Oct 18th, 2017 | Filed under: State of the Industry, Manager Selection, Newly Added

By Charles Skorina With 76 firms heard from, we’re now reporting $1.62 trillion in full-discretion assets under management by outsourced chief investment officer firms. That’s a year-over-year jump of $292 billion – or 18 percent – since September, 2016. The number of reported RFPs is also rising as institutions seek better returnsRead More


The Function of the High-Watermark: Not What You Think

Oct 1st, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added

A new paper in the Journal of Accounting and Finance discusses hurdle rates and high watermarks, and how they affect, or at least correlate with, performance. A hurdle rate is a minimum contractually specified rate of return that a hedge fund must achieve in order to collect performance fees. ARead More


Cautious Numbers Estimates: A Comparative Look

Sep 26th, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

On August 29, we at AllAboutAlpha ran a summary of the latest Eurekahedge report, saying that total hedge fund industry assets around the globe were $2.33 trillion, and that this figure was up by $108.6 billion over the first seven months of 2017. We heard soon thereafter from a readerRead More


Investor Sentiment: Fees, Redemptions, Structures

Sep 4th, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

Credit Suisse, in its new report on its mid-year survey of hedge fund investor sentiment, says that there is “continued appetite to allocate to hedge funds” and that there is increased interest, especially, in quantitative strategies. Specifically, 81% of investors say that they will likely make allocations to hedge fundsRead More


Eurekahedge Reports: Total Industry Assets Stand at $2.33 Trillion

Aug 29th, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, ESG, Hedge Funds

Eurekahedge’s August report says that the Eurekahedge Hedge Fund Index grew by 0.88% in July 2017, while the underlying markets represented by the MSCI World Index grew by 1.64%. For June, overall, managers reported performance based losses of $8.4 billion, so that the industry growth was due entirely to netRead More


Half-Time Report on PwC’s Vision for Asset Management

Aug 20th, 2017 | Filed under: State of the Industry, Access to Alternatives, Featured Post, Manager Selection, Newly Added

Three years ago PwC published a paper on what they expect the asset management world will look like in 2020 – which is, as it happens, three years from now. We have reached the half-point in the hypothetical timeline. Much in the report still holds up, though of course itRead More


Real Estate Tops the Willis Alternative Investment League Table

Aug 10th, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

Willis Towers Watson (NASDAQ: WLTW) recently posted its Global Alternatives Survey. WLTW is a consultancy with a long history, roots going back to 1828, and that now has 40,000 employees serving clients in 140 countries. The gist of its new report is that the alternatives asset industry has grown toRead More


Til and Heckinger on Commodity Debacles, Part II

Aug 6th, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Risk Management

A new paper available at SSRN looks at two infamous commodity industry melt-downs: Amaranth and MF Global. It offers a diagnosis of each. The paper is co-authored by Hilary Till, of EDHEC – Risk, and Richard Heckinger, of the Working Group on Financial Markets, Federal Reserve Bank of Chicago. InRead More


Hedge Funds in the United Kingdom

Jul 27th, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added

Just prior to the June 8 election in the UK this year, Preqin took a look at the state of the hedge fund industry there. Interest in this subject matter is high for the alternative industry globally, given London’s centrality and the great deal that is riding on how theRead More


Skin in the Game: Testing a Cliché

Jul 16th, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

One of the most well-worn clichés in the hedge fund industry is the phrase “skin in the game.” Investors want managers who have “skin in the game,” that is, managers who risk/hedge their own money the same way they are risking/investing their outside investors’ money. A recent paper by ArpitRead More


How Do They Get Those Non-Correlated Returns?

May 30th, 2017 | Filed under: Featured Post, Manager Selection, Newly Added, Risk Management, Commodities & Natural Resources

In a recent paper Mark Shore, of Shore Capital Management, has discussed overlaying of strategies in managed futures, saying that it is something he covers in his course on managed futures at DePaul, but that in general it “is not discussed as much as it should be.” Behind that question,Read More


First Quarter: An Industry Recovers From a Dry Spell

May 18th, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Hedge Funds

Preqin’s review of the hedge fund space in the first quarter of 2017 describes the quarter as a time of “return to form” after a dry spell. Two thirds of the investors interviewed by Preqin at the end of 2016 had said that their hedge fund investments had failed toRead More


Risk Management Isn’t Just Fund Selection

Apr 27th, 2017 | Filed under: Featured Post, Private Equity, Manager Selection, Newly Added, Risk Management

New Strategies for Risk Management in Private Equity, a new book from Private Equity International, is an anthology of papers on the titular subject. It is edited by Dr. Ivan Herger to offer investors in PE new perspectives on the field. Herger, a managing director at Capital Dynamics, has aRead More


Metals and Mining: A Tale of Two Doughnuts

Apr 12th, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Newly Added, Commodities & Natural Resources

Preqin has turned its Spotlight on Real Assets in a new publication, drawing our attention in particular to metals and mining. Among the institutional investors that say they are targeting unlisted metals and mining focused funds over the coming twelve months, Preqin names three as “samples”:  the Compagnia di SanRead More


A Look at Sustainable Investment around the World

Apr 6th, 2017 | Filed under: State of the Industry, Featured Post, Manager Selection, Asset Allocation, ESG

The Global Sustainable Investment Alliance, a collaboration of green investment-oriented entities, has released its latest Global Sustainable Investment Review, looking at the state of SRI investments. This is the third in a series of reports “presenting results from Europe, the United States, Canada, Asia, Japan, and Australia and New Zealand.”Read More