Browsing: Newly Added

Newly Added

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


What About Beta? | Does Anyone Give a Dodd-Graham About Value(s) Anymore?

Jan 25th, 2021 | Filed under: Newly Added, What About Beta?

By Bill Kelly, CAIA Association CEO Seventy years ago this month, ironically, the Supreme Court ruled that the incitement to riot is not protected speech and can be grounds for arrest. In other septuagenarian January news, Security Analysis, The Classic Edition 1951 by Graham and Dodd was released. Both thenRead More


Lenders: Project Financing Availability is Key to EGD’s Success

Jan 24th, 2021 | Filed under: State of the Industry, Featured Post, Real Estate, Infrastructure, Newly Added, ESG, Commodities & Natural Resources

EUPOPEAN GREEN DEAL – TOWARDS A ZERO-CARBON URBAN ENVIRONMENT, Part 5 By Christos Angelis, CAIA – Director at Masterdam This is the fifth article in this series. For Part 1, please click here. LENDERS TO PLAY A MAJOR ROLE IN THE SUCCESS OF EGD As discussed in previous articles, theRead More


Strategic Note: Improved Smile-Implied Hedging

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

A recent paper by two Canadian scholars looks to improve on the art of smile-implied option replication. Pascal Francois, of the HEC Montreal Department of Finance, and Lars Stentoft, of the University of Western Ontario, Department of Economics, begins with the observation that options can be dynamically replicated using model-freeRead 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


Green Bonds: Going Green Fast

Jan 13th, 2021 | Filed under: State of the Industry, Featured Post, Newly Added, ESG

By Aswini Bajaj, CA, CS, CFA, FRM, CAIA, CIPM, CCRA, CIRA, CIIB, AIM & Team Leveraged Growth Introduction Since the mid-20th century, mankind has faced the problem of self-induced climate change which has caused ecological havoc and is now also impacting the economy. The International Energy Agency (IEA) estimates thatRead More


The New ESG Guardians: Sovereign Investment Funds to Shape the Future Digital Economy

Jan 12th, 2021 | Filed under: State of the Industry, Featured Post, Newly Added, Asset Allocation, ESG

By Winston Ma, CFA & Esq – Adjunct Professor, NYU School of Law Who holds the power in financial markets? For many, the answer would probably be the large investment banks, big asset managers and hedge funds that are often in the media’s spotlight. But more and more a newRead 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


Private Equity and the Leverage Myth

Jan 6th, 2021 | Filed under: Featured Post, Private Equity, Private Debt, Newly Added, Asset Allocation

By William Kinlaw, CFA This article offers commentary and highlights from “Private Equity and the Leverage Myth” by Megan Czasonis, William Kinlaw, Mark Kritzman and David Turkington in The Journal of Alternative Investments. You can read the full paper here.  The private equity market is on an astonishing growth trajectory.Read More


The Challenges—and Opportunities—of Chinese Distressed Debt

Jan 4th, 2021 | Filed under: Featured Post, Newly Added, Hedge Funds

By Dinny McMahon, Economic Advisor to ShoreVest For the last few years, China has been involved in a slow-moving cleanup of its banking system, creating vibrant distressed debt and special situations opportunities for investors. Those opportunities have been heightened by the pandemic which is forcing banks to accelerate their paceRead More


What About Beta? | Finally, Hindsight Is 2020

Jan 3rd, 2021 | Filed under: State of the Industry, Private Equity, Newly Added, Asset Allocation, What About Beta?, Hedge Funds

By Aaron Filbeck, CFA, CAIA, CIPM, FDP – Director, Global Content Development at CAIA Association Well…we made it. This has been the longest decade year of our lives. Whether it’s been personal or professional circumstances, or simply having been an investor in this market, none of us could escape theRead 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


What About Beta? | An Investors First Agenda for the Biden Administration

Dec 20th, 2020 | Filed under: Newly Added, What About Beta?

By John Bowman, CFA This week’s What About Beta column is an excerpt from our open letter to the incoming Biden-Harris Administration. Please read the full letter here. A hearty congratulations to President-elect Biden and Vice President-Elect Harris.   In your victory speech, you claimed that regardless of our voting preference,Read More


ESG and Its Growing Influence in the Timberland Investment Sector

Dec 17th, 2020 | Filed under: Featured Post, Private Equity, Newly Added, ESG, Commodities & Natural Resources

By Chung-Hong Fu, Managing Director, Research Timberland Investment Resources, LLC As interest in Environmental, Social and Governance (ESG) issues increases, investors and investment managers are working to define and refine what ESG means and what ESG engagement looks like in the context of their portfolios and the asset classes inRead More


Hedge Fund Battle: Discretionary vs Systematic Investing

Dec 15th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Hedge Funds

By Nicolas Rabener, CAIA, Factor Research & Karl Rogers, ACE Capital Investments INTRODUCTION Anyone who has watched the hit TV show “Billions” will have noticed that the hedge fund billionaire Bobby Axelrod and his former lieutenant, and occasional nemesis, Taylor Mason have totally different trading styles. Bobby, although mathematically gifted,Read More


The Future of Hedge Funds: Timing!

Dec 13th, 2020 | Filed under: Featured Post, Newly Added, Hedge Funds

There’s an old joke. Even, if you like, a meta-joke. It probably dates back to vaudeville, and it takes the form of an exchange between the stage comic and a selected victim from the audience. It goes like this: Comic: Today’s your lucky day. I’m going to tell you theRead More


Using ESG as a Risk Management Tool

Dec 10th, 2020 | Filed under: State of the Industry, Newly Added, Asset Allocation, ESG, Risk Management

In the first half of 2020, a period dominated by the spread of the Covid-19 virus and by the shut-down of economic activity in country after country around the world, investing with an eye to environmental, social, and governance issues proved valuable as a risk management measure, according to anRead More


Strategic Portfolio Construction with Private Equity

Dec 8th, 2020 | Filed under: Featured Post, Private Equity, Newly Added, Asset Allocation

By Giulio Renzi-Ricci, Senior Investment Strategist, Vanguard  Investor interest in private equity has been rising over the last two decades. Today private equity represents a growing opportunity for multiasset portfolios, offering the potential to significantly outperform public investments. In a new research paper, we examine the role private equity canRead More


Our Commitment to Better Due Diligence in Alts

Dec 7th, 2020 | Filed under: Featured Post, Newly Added

In a year that’s lacked so much of what makes our global CAIA community special—namely, the in-person gatherings of local chapters and the knowledge sharing that takes place at our bigger events around the world—we strived to continue to engage our membership, gleaning their expert insights and exchanging the bestRead More


How Challenges in Commodity Trade Finance are Creating New Investment Opportunities

Dec 6th, 2020 | Filed under: Emerging Asset Classes, State of the Industry, Featured Post, Newly Added, Commodities & Natural Resources

By Annie Yung 2020 certainly has had many challenges across markets, and trade finance has been no exception. Trade finance is critical for global companies for support of operations and to enable the expansion of trade and growth. The COVID-19 pandemic has fueled a growing funding gap and has exposedRead More


European Green Deal: Towards a Zero-Carbon Urban Environment (Part 4)

Dec 3rd, 2020 | Filed under: Emerging Asset Classes, State of the Industry, Featured Post, Real Estate, Infrastructure, Newly Added, ESG, Commodities & Natural Resources

Part 4: Real Estate Developers: Hostage of Trophy Hunting Investors & Certification Standards? By Christos Angelis, CAIA – Director at Masterdam This is the fourth article in this series. Please read Part 1, Part 2 and Part 3. THE RELEVANCE OF THE EUROPEAN GREEN DEAL FOR DEVELOPERS Real estate development in the EuropeanRead More


What Price Private Equity Returns?

Dec 2nd, 2020 | Filed under: Featured Post, Private Equity, Newly Added

What is the expected return on private equity? Not at the deal level, but in terms of the return on the underlyings for which actual market prices are not available? That is a tricky empirical question because, after all since we know that actual market prices are not available! AfterRead More


Structured Finance: Unleash the Inefficiency

Nov 29th, 2020 | Filed under: State of the Industry, Featured Post, Newly Added, Hedge Funds

By Shreekant Daga, CAIA, CFA, FRM What is structured finance? Finance has several theoretical traditional and modern frameworks in practice. Needless to say, often the frameworks have conflicting assumptions. The sub-prime mortgage crisis is a modern classic example. Data-reliant credit rating agencies (CRAs) had not seen such a large drawdownRead More


The New Generation of Behavioral Finance

Nov 26th, 2020 | Filed under: Featured Post, Newly Added, Asset Allocation, ESG, Risk Management, Hedge Funds

Meir Statman, a professor of finance at Santa Clara University and a consultant to Avantis Investors, has focused his scholarly efforts for decades on behavioral finance, and those efforts have given us a recent book on the subject, Behavioral Finance: The Second Generation. In Statman’s view the first generation ofRead More


Measuring the Inflation Risk of Three ‘Inflation-Hedges’

Nov 24th, 2020 | Filed under: Featured Post, Newly Added, Asset Allocation, Risk Management, Commodities & Natural Resources

By Doris Bao, FRM and Alex Botte, CFA, CAIA, Client Solutions Research team at Two Sigma In our previous post on inflation, we covered how the Local Inflation risk factor in Venn, Two Sigma’s risk analytics platform, is constructed and we reviewed its historical performance. The primary conclusion was thatRead More


Growing a Green Decision Tree—Machine Learning and ESG

Nov 23rd, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, ESG

Assuming that the growth of environmental, social, and governance-based investing is not yet at, but is approaching, a tipping point, and assuming that knowing that tipping point with precision will yield alpha, can machine learning help find it? That is the question posed in a recent paper by the globalRead 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


Keynes vs. Markowitz ‘Thrilla in Portfolia’

Nov 19th, 2020 | Filed under: State of the Industry, Featured Post, Newly Added, Asset Allocation, Risk Management, Hedge Funds

By Hossein Kazemi, PhD, CFA, CAIA Association, FDP Institute, and Isenberg School of Management Introduction While Keynes vs. Markowitz is not as thrilling as Ali vs. Frazier, it has important implications for investors when selecting funds and investment managers when constructing portfolios.  In this “fight,” we have in one cornerRead More


What Is the Future of Alternatives?

Nov 17th, 2020 | Filed under: State of the Industry, Featured Post, Private Equity, Newly Added, Asset Allocation, ESG, Hedge Funds

By Grant Murgatroyd, senior writer EMEA at Preqin Preqin predicts that alternative assets under management will rise to $17.2 trillion in 2025. We believe the COVID-19 induced slowdown in 2020 will be temporary and lead to a larger, more efficient, and more sustainable industry. Assets under management (AUM) in alternativesRead 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


A Renewal of the Value Factor in Equities

Nov 12th, 2020 | Filed under: Featured Post, Newly Added, Asset Allocation, Risk Management

David Blitz, the head of quant research at Robeco, and Robeco researcher Matthias Hanauer have posted a commentary on the value factor. This is one of the classic Fama-French factors. It began life in 1992 as a simple “high minus low” (HML) calculation; the postulation that stocks with high book-to-marketRead More


Markets in the Rear-View Mirror: COVID-19 Collision

Nov 10th, 2020 | Filed under: State of the Industry, Featured Post, Newly Added, Asset Allocation

By Mike Nigro, Managing Director and Head of Client Solutions Research at Two Sigma and Doris Bao, FRM, Quantitative Researcher on the Client Solutions Research team at Two Sigma During recent months, the COVID-19 pandemic has reshaped the world, causing devastating damage to the global economy. The world is nowRead More


OECD Works on Sorting Through the ESG Ratings Systems

Nov 8th, 2020 | Filed under: State of the Industry, Featured Post, Newly Added, Asset Allocation, ESG, Risk Management

A report from the Organization for Economic Cooperation and Development critiques “current market practices” in connection with Environmental, Social, and Governance investing. It says that the bewildering ratings, investment terminology, and individual metrics, “present a fragmented and inconsistent view of ESG risks and performances.” On the bright side, the OECDRead More


European Green Deal: Towards a Zero-Carbon Urban Environment (Part 3)

Nov 5th, 2020 | Filed under: Featured Post, Real Estate, Newly Added, ESG, Commodities & Natural Resources

Part 3: Real Estate Tenants: Free Riders or Simply Uninformed? CHRISTOS ANGELIS, CAIA – Director at Masterdam This is the third article in this series. Please read Part 1 & Part 2.  BLAME GAME BETWEEN TENANTS & LANDLORDS The European Green Deal (EGD)[i] is expected to be a catalyst forRead More


Art Investing: Recession and Volatility-Related Case Studies

Nov 2nd, 2020 | Filed under: Featured Post, Private Equity, Newly Added, Asset Allocation

By Arthena’s Art Market Research Team The effects of recessions on fine art prices are, without a doubt, the topic most-opined-about in our industry’s relatively small financial news echo chamber. Any hint of a market slowdown tends to flood our inboxes with an unyielding torrent of analysis, evidenced by theRead More


Assessing the Impact of COVID-19 Across Real Estate Sectors

Nov 1st, 2020 | Filed under: Featured Post, Real Estate, Newly Added, Commodities & Natural Resources

By Wu Guowei Jack, CFA – Director of Content, APAC at CAIA Association The COVID-19 pandemic has had a devasting toll on human life, and has impacted economies and industries globally. The effect on real estate is significant, as real estate can be considered a service sector that fulfills end-userRead More


The Dead vs. the Living Stocks

Oct 29th, 2020 | Filed under: State of the Industry, Featured Post, Newly Added, Asset Allocation

By Nicolas Rabener of FactorResearch (@FactorResearch) INTRODUCTION Walking through financial centers like London or New York in the spring of this year felt in many ways like being a zombie movie. Shops were boarded up, restaurant and cafes closed, and office towers unoccupied. The few people walking outside were quickRead More


Micro Financing as a Sustainable Investment

Oct 26th, 2020 | Filed under: Emerging Asset Classes, State of the Industry, Featured Post, Newly Added, ESG

Micro finance is a very contested subject within the realm of ESG investing. The idea, for which a Bangladeshi, Muhammad Yunus won a Nobel Peace Prize in 2006, is that very small loans to very small-scale entrepreneurs within large populations that have historically gone unbanked, and in particular that haveRead More


The Alternative Imperative, Part II

Oct 25th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Asset Allocation, Hedge Funds

By Rick Roche, CAIA, Little Harbor Advisors, LLC Part 2 of a two-part series on The Alternative Imperative in the COVID Era. In Part 2, the author tackles notorious technology laggards. This piece transitions to alternative data pioneers (Alt-Venturers) and the 4-1-1 on Alt-Data: Hype or Hope? The author dispelsRead 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


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


It Isn’t The Strategy: It’s the Execution that Gets You to Alpha

Oct 18th, 2020 | Filed under: Featured Post, Private Equity, Newly Added

A recent study of private equity, available as a working paper by the European Bank for Reconstruction and Development, seeks to open what the authors see as the “black box of value creation” in private equity. What they find inside the box is this: “[It] is not the ex-ante selectionRead More


Don’t Get Carried Away by Carry

Oct 15th, 2020 | Filed under: Featured Post, Newly Added, Asset Allocation, Hedge Funds

By Nicolas Rabener of FactorResearch (@FactorResearch) INTRODUCTION There are folks in finance who know and folks who don’t know. The latter group often drives the former crazy by abusing terminology. For example, moderators and guests on CNBC talking about momentum and growth stocks as if they were the same thing.Read More


Three Sources of Alpha: A Call for Small Manager Investment

Oct 13th, 2020 | Filed under: Featured Post, Private Equity, Newly Added, Asset Allocation, Risk Management, Hedge Funds, Commodities & Natural Resources

By Karl Rogers, ACE Capital Investments I recently finished a multi-strategy fund of hedge funds build for an institution where I focused on three sources of alpha: small manager, equities and commodities. Small Manager Alpha Given that “small” managers have been found to outperform their larger peers[1], why do manyRead More


How Green is the Cannabis Trade?

Oct 12th, 2020 | Filed under: Featured Post, Newly Added, Asset Allocation

Last week we looked at recent developments in the state-legal marijuana markets. Among the observations we made there, these three stand out: Marijuana is becoming an essential business and a permanent feature of the landscape, surviving crises and helping the portfolios of investors do the same; The major players areRead More


European Green Deal: Towards a Zero-carbon Urban Environment

Oct 8th, 2020 | Filed under: State of the Industry, Featured Post, Real Estate, Newly Added, Commodities & Natural Resources

Part 2: Real Estate Owners: Moral Obligation versus Economic Benefit CHRISTOS ANGELIS, CAIA – Director at Masterdam This is the second article in this series. For Part 1, please click here. EUROPEAN RENOVATION WAVE The European Green Deal (EGD)[i] is paving the way for stricter regulations and more applied measuresRead More


The Alternative Imperative, Part 1

Oct 6th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added, Hedge Funds

By Rick Roche, CAIA, Managing Director of Little Harbor Advisors, LLC Part 1 of a two-part series on Alternative Investment Data (Alt-Data) in the COVID Era. In Part 1, the author makes the case for high-frequency, short-interval Alt-Data while discussing three primary drawbacks of interpreting official economic statistics amid aRead More


Introduction to Insurance-Linked Securities

Oct 5th, 2020 | Filed under: State of the Industry, Featured Post, Newly Added, Hedge Funds

By Chin Liu, Director of Insurance Linked Securities and Quantitative Research, Portfolio Manager; Campbell Brown, Portfolio Manager;  and Joe Morgart, Client Portfolio Manager,  at Amundi Pioneer Insurance-linked securities (ILS) is an alternative asset class offering investors the potential for attractive risk-adjusted returns and desirable diversification1 benefits. This overview describes aRead More


What About Beta? | The October Effect: A Proxy for Patience

Oct 5th, 2020 | Filed under: Newly Added, What About Beta?

By Bill Kelly, CAIA Association CEO Benjamin Graham’s mythical Mr. Market remains alive and well. He continues to always be available, but is often irrational, emotional, and inefficient. These same characteristics embody why he could be looked upon as the de-facto patron saint for the month of October where theRead More


What is Becoming Manifest about Cannabis?

Oct 4th, 2020 | Filed under: State of the Industry, Featured Post, Newly Added, Asset Allocation

Consumers in the United States are expected to purchase US$10 billion in state-legal cannabis by the end of this year. This makes it a new emerging growth market at a time when so many other markets are contracting or failing altogether under the weight of the pandemic and other economicRead More