Chalk another one up for the Transatlantic Trio
Mar 19th, 2008 | Filed under: Alternative Beta & Hedge Fund ReplicationIn the late 1990’s a couple of academics David Hsieh (Duke University) and Bill Fung (London Business School) wondered if traditional statistical analysis was appropriate for a new type of investment fund - the hedge fund. Although they had collaborated since early that decade, their 1997 paper “Empirical Characteristics of Dynamic Trading Strategies: The Case of Hedge Funds” put the two on a collision course with history. Several years later they teamed up with the equally prolific Narayan Naik, who worked with Fung at LBS and met Hsieh at Duke while doing his PhD. Last week the trio landed another in a long string of commercial successes advising some of the world’s most powerful financial institutions.
On Friday, State Street Global Advisors announced they had landed a US$200 million “hedge fund replication” mandate from the Universities Superannuation Scheme, a British pension plan serving the country’s academic community. This is newsworthy since its one of the first major pensions to pursue such a strategy (although there has been lots of talk).
A State Street official sounded a refrain that will be familiar to regular readers of AllAboutAlpha.com:
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