Browsing: State of the Industry

State of the Industry

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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


What About Beta? | The Kudlow Report(s)

Oct 26th, 2020 | Filed under: Data Science & AI, State of the Industry, What About Beta?

By Bill Kelly, CEO, CAIA Association Maybe Howard Marks was right when he wrote about Investing Without People. In that memo he talks about the machine which can largely excel at anything that is quantitative and can be counted: in games like chess and Go, the machine can study andRead 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


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 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


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


Investment Professionals Must Rise Above Juvenile Partisanship to Protect Retirement Security

Sep 25th, 2020 | Filed under: State of the Industry, Newly Added

By John Bowman, CFA, Senior Managing Director,  CAIA Association The retirement crisis “plague” existed well before COVID-19. And yet, in a time that should have fostered unity for protection of human dignity and spirit, we’re perhaps more divided than ever. We’ve completely lost our ability to conduct civil discourse; our profession mustRead More


Retirement’s Mid-Life Crisis

Sep 22nd, 2020 | Filed under: State of the Industry, Featured Post, Private Equity, Newly Added, Asset Allocation, Hedge Funds

By Rob Croce, PhD – Managing Director and Portfolio Manager at Mellon & Aaron Filbeck, CAIA, CFA, CIPM – Associate Director of Content Development at CAIA Association In 2000, United States 10-year government bonds rates were 6% and the median U.S. public pension plan had an actuarial return assumption ofRead More


CONNECTING THE DOTS WITH AI AND KNOWLEDGE GRAPHS

Sep 20th, 2020 | Filed under: Data Science & AI, State of the Industry, Featured Post, Newly Added

By Mehrzad Mahdavi, PhD, Executive Director, FDP Institute Imagine if your social media posts or articles were generated automatically by AI as if they were authored by you…well, that day is here! The next generation of NLP called “Generative Pre-trained Transformer, third generation”, or GPT-3, was recently released for betaRead 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