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Endowments and foundations typically are considered the early adopters in alternative investments. Watch this video with CAIA Association's Director of Curriculum Keith Black, PhD, CFA, CAIA, as he explains the different structures of endowments and foundations and why they are uniquely geared for successful alternative investing.
Operational risk within investment management firms can stem from many sources. Firms also have varying tolerance levels for accepting or handling such risk. SEI believes virtually every firm can benefit from taking a fresh look at common areas of risk and consider the variety of relatively straightforward risk management measures that can readily be deployed. In that spirit, SEI put together a 10-part guide as an effective risk management tool to set the foundation for operational excellence. Below are excerpts ...
By Charles Skorina In our last letter we took a hard look at recent investment performance among the eight Ivy League endowments. [See NL44 at http://www.charlesskorina.com/775/] As a bonus we added four "Alt-Ivys" to round it up to an even dozen. These are all, of course, privately-funded institutions. Now, we turn to the cream of our state-supported schools, the twelve Public Ivys. The traditional Private Ivy endowments, including Harvard and Yale, get lots of scrutiny for obvious reasons. They control a lot of money; they're ...
A new paper by David H. Bailey and Marcos Lopez de Prado suggests that one of the consequences of over-reliance on traditional portfolio performance metrics such as the Sharpe ratio is: too many hedge funds are too quick to fire their portfolio managers.
Specifically, skilled managers are hitting the dust before they have an opportunity to win their way back from a draw-down.
One recurrent problem for those who hire and fire portfolio managers of course is that it is difficult to be sure that a particular negative outcome is the consequence ...
Whew. This one’s confusing.
The Federal Circuit Court of Appeals, in a badly split decision issued May 10th, has affirmed a holding of the district court below in a controversial patent-law case, one involving four patent claims by Alice Corporation (a technology company owned in part by National Australia Bank Ltd.) The decision takes up 135 pages, and my head is still spinning after my recent efforts to absorb them.
Ten judges took part in the decision. Of these, five argued that the district court was right on the law, when it ...
The Alternative Investment Fund Managers’ Directive comes into effect in the European Union this July. Accordingly, Global Perspectives has posted the first part of a planned two-part white paper about compliance. One of the major points the report makes is that this is an EU development that is necessarily a matter of concern far from Europe’s shores.
The author, Shane Brett, is no stranger to readers of AllAboutAlpha, and he has helped us keep track of AIFMD as it has moved toward implementation step by step. Now he addresses several questions ...
Clifford S. Asness and two associates have made the case in a recent paper not only that a strategy of betting against beta (BAB) can yield positive returns, but that its success in doing so is not the consequence of a preference that the strategy creates for certain industries over others. This contravenes the interpretation that certain earlier authors, including for example Ronald Shah of Dimensional Fund Advisers, have given to the success of BAB.
Stated very briefly: the BAB strategy works because low-volatility equities have higher returns than they ‘should’ ...
A recent publication on hedge fund strategies posits on one hand that continuous monetary easing actions by central bankers will avoid any sharp market corrections through the remainder of 2013. On the other hand, the same publication does not anticipate “any big rotation from bonds into equities.” There will be no very dramatic recovery in the developed countries. In the U.S., for example, though PrevInvest – the market intelligence group offering this report – sees a ...
The recent rumors that George Soros was involved in a big way in the fall off the Australian dollar sent us back to the good old days of Soros’s notoriety, the 1992 deal that forced the Brits to pull out of the European Exchange Rate Mechanism, and that is always invoked to explain why they aren’t in the euro to this day. Actually, even if we assume the rumors are accurate, the two situations are very ...
The Securities and Exchange Commission proposed on May 1 a new set of rules and interpretive guidance to ease the concerns of some overseas parties and regulators over cross-border security-based swaps. This is an extremely complicated proposal, taking up 650 pages, designed to clarify the significance of Title VII, the swap-markets-specific portion of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It may set the stage for further tension between the SEC on the one ...
A recent publication on merger arbitrage strategies makes the case that global M&A activity will “remain muted” despite some bright spots. PrevInvest, which describes itself as offering “leading intelligence and independent insight,” cited Dealogic in saying that M&A activity fell in 2012, 3% from 2011 for all deals. But there was some pick-up in the first quarter 2013, with a surge of megadeals in the U.S. in particular. Notably, competing bidders have turned Michael Dell’s attempt ...
