Is Alpha Spelled A-S-I-A?
Jul 23rd, 2007 | Filed under: Hedge Fund Industry Trends
Some time ago, we discussed the role of market inefficiencies - particularly geographically localized market inefficiencies - in alpha-generation. As institutional investors are well aware, it’s extremely difficult to get an “edge” in highly-liquid capital markets such as that of US large cap securities. Thus, the prototypical example of a portable alpha strategy is to go long a manager operating in a less efficient market such as emerging markets manager, simultaneously short that manager’s underlying (beta) benchmark, and use the proceeds to go long the S&P 500. This way, the resulting exposure would likely satisfy any mandate to remain exposed primarily to US large cap securities, while the opportunity for upside (or downside) existed via the emerging markets manager.
At midnight Eastern time, Alpha Magazine released the latest in its series of hedge fund rankings (available here). This one is a ranking of the 25 largest Asian hedge fund managers. Executive Editor, Michael Peltz tells us this ranking is unique because it covers Asian hedge funds, not just global hedge funds that invest in Asian capital markets (as most do).
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