All Posts by cfaille

All entries by this author

AIMA Suggests Third Method For Leverage Measurement

Feb 7th, 2016 | Filed under: Hedge Fund Regulation, Newly Added, Regulatory Environment, The A.I. Industry

At present, AIFMD allows for either a gross or a commitment method of measuring leverage. AIMA has suggested a third method. The Context The European Commission has issued a “call for evidence” on the EU regulatory framework for financial services. One of the comments the EC received on this subjectRead More


“We Aren’t Obsolete,” Says DTCC White Paper

Feb 4th, 2016 | Filed under: Newly Added, Risk Management & Operations, Service Providers, Technology

The Depository Trust and Clearing Corporation has issued a new white paper on block chains and their significance in the context of the post-trade landscape. Block chains, also known as distributed ledgers, are a hot new technology, made so in large part by the cryptocurrency Bitcoin and by the publicityRead More


Real Estate: Footloose Money Chasing Cross-Border Deals

Feb 2nd, 2016 | Filed under: Liquid and Fixed Income Real Estate, Newly Added, Real Assets, Real Estate, Real Estate Equity Investments

Savills, a global real estate services provider listed on the London Stock Exchange, has released its annual report on the role that real property plays in the investment world.  Here are some of its key points: Real estate assets constitute 60% of the value of all assets worldwide; Residential realRead More


Challenges to Mergers: Not So Automatic Anymore?

Jan 31st, 2016 | Filed under: Hedge Funds, Legislation/Court rulings, Newly Added, Regulatory Environment, Relative Value Hedge Funds, The A.I. Industry

The Delaware Court of Chancery has become increasingly hostile of late to lawsuits that challenge corporate mergers on fiduciary grounds. This is important, because the course of recent decades certain boilerplate sorts of lawsuits have become a regular feature of the mergers-and-acquisitions landscape in the U.S.  The law has allowedRead More


Eurekahedge: Performance after the ECB Underwhelms

Jan 28th, 2016 | Filed under: Benchmarking & Performance Attribution, Equity Hedge Funds, Hedge Funds, Macro and Managed Futures Funds, Newly Added, Performance, Analytics & Metrics

The latest Eurekahedge report says that regional mandates for the month of December 2015 produced quite mixed results. Asia ex-Japan managers yielded the best results, gains of 1.45%. Their Japanese counterparts produced 0.27%. In annual terms, Asia ex-Japan funds delivered 8.23% in 2015. Such funds saw an annual AUM growthRead More


Insider Trading: Big-mouth Bankers and Remote Tippees

Jan 26th, 2016 | Filed under: Legislation/Court rulings, Newly Added, Regulatory Environment, The A.I. Industry

The US Supreme Court has accepted an appeal from a Ninth Circuit decision on insider trading. Whatever the Justices do with this case, they will surely shed some light on the future of this sometimes very confusing body of law. Specifically: on January 19, the high court granted cert onRead More


More about Arch Coal and the Dusty Trail Ahead

Jan 24th, 2016 | Filed under: Commodities, Commodities, Commodities: Examples, Energy, Investing in Commodities, Newly Added, Other Topics in A.I., Socially responsible investing, SRI and Clean Energy

I wrote here last week about the demise of Arch Coal.  I was reminded of the incompleteness of my treatment there by the commenters on that piece, and I’ve been reminded again by subsequent developments. More then: in December 2013 Arch made a tender offer for its $600 million ofRead More


Banks (PBs): Turning Cash Away

Jan 21st, 2016 | Filed under: Hedge Fund Regulation, Hedge Funds, Newly Added, Regulatory Environment, Structure of the Hedge Funds Industry, The A.I. Industry

The Alternative Investment Management Association and S3 Partners jointly sponsored a new survey and report on the consequences of the Basel III reforms on the alternative-investment world. Basel III, a voluntary set of banking-supervisory standards for capital adequacy, stress testing, and market liquidity, published in its final form by theRead More


CFDs and Their Platforms in Germany

Jan 20th, 2016 | Filed under: Currencies, Forex, Newly Added, The Global Economy & Currencies

FXCM, an online provider of foreign exchange trading related services, announced January 6 that it has entered into a partnership with a German broker, FXFlat, as part of its strategic expansion into the German market. The immediate consequence of the partnership is that FXFlat’s customers can access the FXCM TradingRead More


Nasdaq Puts Its Forex Plans on Hold

Jan 18th, 2016 | Filed under: Currencies, Finance & Economics, Forex, Newly Added, The Global Economy & Currencies

There is an ancient principle of prudence, “don’t fix what isn’t broken.” Thomas Jefferson alludes to it in the Declaration of Independence. Prudence dictates that institutions “long established” are not abandoned for “light and transient causes.” It is possible that many of those who trade currencies today believe that theRead More


Arch Coal: Another One Bites the Coal Dust.

Jan 13th, 2016 | Filed under: Alternative energy, Commodities, Commodities, Commodities: Examples, Energy, Investing in Commodities, Newly Added, Other Topics in A.I., SRI and Clean Energy

Arch Coal, one of the biggest coal companies in The United States, entered Chapter 11 Monday morning, Jan 11. A prominent law firm, Davis Polk & Wardwell, will be taking it through the process, as will financial advisor PJT Partners. Arch (NYSE:ACI) hit its recent high stock price on AugustRead More


A Perennial Gale Hits the Coffee Industry

Jan 11th, 2016 | Filed under: Agriculture, Commodities, Commodities, Farmland, Investing in Commodities, Natural Resources and Land, Newly Added

The popularity of the drip coffee maker is in decline, or at least it has passed its peak.  In 2013. 58% of coffee drinkers had used such a coffee maker on the day before the day they were asked, that is, “yesterday.” That number was down to 54% in 2014,Read More


Smart Beta Strategy: Aces Australian Scrutiny

Jan 10th, 2016 | Filed under: Allocating to A.I., Alpha & Beta, Alternative Beta & Hedge Fund Replication, CAPM / Alpha Theory, Finance & Economics, Financial Economics Theory, Newly Added, Other Topics in A.I., Smart Beta

Paul Docherty, a senior lecturer at Newcastle Business School. University of Newcastle, in Australia, has studied the performance of the factors that underlie smart beta portfolios within the equity markets of that country. On the basis of a long time-series of data, Docherty has concluded that four such factors “allRead More


The SEC Staff Proposal on ‘Accredited Investor': Index Thresholds for Inflation, Create Grandfathers

Jan 7th, 2016 | Filed under: Newly Added, Regulatory, Regulatory Environment, The A.I. Industry

Indexation would of course tend to contract the number of accredited investors. But other staff recommendations would have the opposite consequence, expanding the number, especially by allowing investors to qualify “based on other measures of sophistication” such as professional credentials, or the successful completion of an examination. Read More


Commodities: Catching a Falling Knife on the High Seas

Jan 5th, 2016 | Filed under: Commodities, Commodities: Examples, Energy, Equity Hedge Funds, Hedge Funds, Newly Added, oil

The problem with a Star Bulk play or with analogous plays in the equity of dry bulk shippers is that the bottom of this bargain basement may not yet have been found. The problem behind the problem is China, which has fallen out of love with imported coal. Read More


Emerging Markets in 2016: Making Necessary Distinctions

Jan 3rd, 2016 | Filed under: Currencies, Emerging markets, Finance & Economics, Newly Added, The Global Economy & Currencies

The present depressed state of commodity prices spells continued trouble for those companies that export said commodities, but also spells opportunity for those that import and make use of them. Some thoughts from Neuberger Berman, with an addendum from BlackRock. Read More


After Seven Years: Philosophical Implications of the Madoff Fraud

Dec 30th, 2015 | Filed under: Derivatives, Due Diligence Process, Equity-linked Structured Products, Newly Added, Operations, Personalities in AI, Risk Management & Operations

It has been seven years and a few days more now since Bernard Madoff acknowledged to authorities that “there is no innocent explanation” for the story they had just heard from his sons. It has been 15 and a half years since Harry Markopoulos ran the numbers regarding Madoff’s performanceRead More


Top Alpha Stories of 2015: Nerds Win Three, Lose Two

Dec 29th, 2015 | Filed under: Commodities, Industry Size & Managers, Investing in Commodities, Newly Added, Regulatory, Regulatory Environment, Structure of the Hedge Funds Industry, The A.I. Industry

We offer our annual review of the five top Alpha stories of the year ending, in the course of which we mention that these are exciting times in the world of basic biological/medical research. They’ve been exciting at least since the completion of the map of the human genome in 2003, when attention turned to what can be done with that map. Read More


Denial: The Role of Naked Shorting in the Fall of Martin Shkreli

Dec 27th, 2015 | Filed under: Equity Hedge Funds, Hedge Funds, Newly Added, Other Topics in A.I., Personalities in AI

The Shkreli case comes at a time when failures to deliver have begun to receive a new level of attention from regulators. Faille looks at the role of naked shorts in his troubles, including his recent indictment.Read More


The 12 Days of Hedge Funds

Dec 24th, 2015 | Filed under: Newly Added

With best wishes of the season and a happy new year for everyone in the AllAboutAlpha family.   On the 12th day of hedge funds my alpha gave to me: 12 tons Big Data, 11 risks well managed, 10 Whales of London, 9 Central bankers, 8 Flash-boys flashing, 7 blackRead More


Eurekahedge: All Regional Mandates Up for November

Dec 23rd, 2015 | Filed under: Allocating to A.I., Benchmarking & Performance Attribution, Event-Driven Hedge Funds, Hedge Funds, Newly Added, Performance, Analytics & Metrics

Faille takes a quick trip around the world with the assistance of Eurekahedge's numbers and graphs showing performance in November 2015 and year to date.Read More


Saudi Arabia: Opening to Distressed Debt Arb?

Dec 22nd, 2015 | Filed under: Business News, Event-Driven Hedge Funds, Hedge Funds, Insolvency, Newly Added

A recent article in The National Law Review says that the Kingdom of Saudi Arabia is about to change its restructuring law in a way that will likely make restructurings more common in that influential country. One implication is that the change will provide alpha-seeking opportunities for investors and tradersRead More


AIMA: 44% of Hedge Fund Firms Planning New Launches in 2016

Dec 20th, 2015 | Filed under: Asset Managers, Industry Size & Managers, Liquid Alternative Investiments, Liquid Alts, Newly Added, Other Topics in A.I., The A.I. Industry

A global survey by PwC and the Alternative Investment Management Association looks at the expansion of the hedge fund industry and the evolution of its distribution model. The most eye-catching statistic from the survey us that 44% of fund managers responding said that they will launch a new fund byRead More


Bitcoin’s Founder: Recent History and 2020 Vision

Dec 17th, 2015 | Filed under: Currencies, Digital currencies, Emerging Alternative Investments, Entrepreneurs, Finance & Economics, Newly Added, Personalities in AI, The Global Economy & Currencies

Two things happened almost at once recently: Wired told us who actually invented bitcoin, (well, it gave the world the latest hot theory), and officials in Australia raided that same fellow’s home in re a tax investigation. More specifically on the first of those points, Wired (and soon thereafter Gizmodo)Read More


Institutions Thinking About Interest Rates and Volatility

Dec 15th, 2015 | Filed under: Allocating to A.I., Benchmarking & Performance Attribution, Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added, Performance, Analytics & Metrics

In recent months, even the anticipation of Fed Reserve tightening has been able to send markets into a tizzy. Now the actual tightening is at last upon us. Both Natixis and Reuters surveys speak to the way the buy-side and sell-side see this. Read More


Arbitrage Pricing Theory and Large Pricing Errors

Dec 13th, 2015 | Filed under: Allocating to A.I., Alpha & Beta, CAPM / Alpha Theory, Finance & Economics, Financial Economics Theory, Hedge Fund Operations and Risk Management, Newly Added, Portable Alpha & Alpha/Beta Separation, Risk Management & Operations, Risk Management Strategies & Processes

Uppal and Zaffaroni use Arbitrage Pricing Theory as a meta-model: a model that can be employed to check the errors in the specification of first-order models that in turn are used to value assets.Read More


The Enabling of the Hedge Fund Fraudsters, Part II

Dec 10th, 2015 | Filed under: Newly Added, The A.I. Industry

What is of interest in the West End case isn’t the question of the guilt of the principal of this Ponzi scheme.. That has long been settled. More of interest is the way this civil case seeks compensation for his victims from his enablers.Read More


Delaware’s Supreme Court Upholds Smack-down of RBC

Dec 8th, 2015 | Filed under: Due Diligence Process, Newly Added, Risk Management & Operations

Some of the reasoning of the courts seems a bit circular to a layperson. Still, the gist is clear enough. Shareholders were cheated when Rural Metro was sold at a price well below its fair market value, and RBC has both the liability and the deep pockets necessary to make that right. Read More


For Practitioners of Risk Parity: Don’t Panic

Dec 6th, 2015 | Filed under: Allocating to A.I., Hedge Fund Operations and Risk Management, Newly Added, Risk management, Risk Management Strategies & Processes

A new paper by Cliff Asness puts the recent relative weakness of Risk Parity Portfolio performance into a broader context. The cumulative excess return from what he calls "simple risk parity" continues to rise steadily though undramatically. Read More


Attack of the Activists: October Setback for NexPoint Still a Setback in November

Dec 3rd, 2015 | Filed under: Legislation/Court rulings, Newly Added, Regulatory Environment

A district court judge in Connecticut now says that upon further consideration “the Court should take Maryland law into account in determining whether NexPoint has made a sufficient showing to obtain a preliminary mandatory injunction.”Read More


Clash of the Hedge Funds: BioPharm Wars

Dec 1st, 2015 | Filed under: Equity Hedge Funds, Hedge Funds, Newly Added, Personalities in AI, Practitioners

CLVS fell nearly 70% on adverse news from the FDA. The tricky call for investors is whether the drop was (a) just enough, (b) not yet enough, or (c) perhaps too much to discount this blow. Two savvy analysts have recently expressed sharply opposed views on this.Read More


DB Global Prime: Hedge Funds See Steady Combined Inflows, But Lots of Action

Nov 29th, 2015 | Filed under: Asset Managers, Benchmarking & Performance Attribution, Equity Hedge Funds, Hedge Fund Strategies, Hedge Funds, Industry Size & Managers, Newly Added, Performance, Analytics & Metrics, The A.I. Industry

DB Prime's researchers have highlighted the multi-year outflows from EM to DM. EM equity inflows in particular reached a peak in early 2011. Since then EM equities have seen an outflow which has benefitted primarily Europe and Japan within the developed world. Read More


India: The Way Up and the Way Down Are Not the Same

Nov 26th, 2015 | Filed under: Finance & Economics, Financial Economics Theory, Newly Added, Other Topics in A.I., Risk Management & Operations, Risk Management Strategies & Processes, SRI and Clean Energy, The Global Economy & Currencies

Faille doesn't mean to argue theology, but he has to observe that a Shariah-based understanding of what constitutes “ethical investing” entails a lot of premises, and if those premises are to be inserted into reasoning about financial economics, they have to bear up to empirical, secular scrutiny. Read More


McKinsey Report Declares North American Asset Management in ‘Robust’ Health

Nov 24th, 2015 | Filed under: Asset Managers, Newly Added, The A.I. Industry

The emergence of new pools of capital has been very good to the asset management world in North America. So, that's good news, right? But? Yes, there's always a 'but.'Read More


AIMA: From Cola Wars to Clusters to Clusters-of-Clusters

Nov 22nd, 2015 | Filed under: Equity Hedge Funds, Hedge Fund Industry Trends, Hedge Funds, Newly Added

Equity neutral funds go far beyond simple pairs trades. Still, for reasons that a simple pairs-trading example can illustrate, equity market neutral funds, a recent paper says, have “demonstrated their resilience over the past 20 years, posting steady long-term risk-adjusted returns.” Read More


The Hunts’ Silver Play, and Other Stories from the Recent Past

Nov 19th, 2015 | Filed under: Commodities: Examples, Hard metals, Newly Added

In January 21, 1980, the Comex board declared the Hunt silver corner an emergency, and the members voted to allow liquidation-only trading. This had its intended consequence of changing the direction of price moves, and a perhaps-unintended consequence of setting off a panic two months later. Read More


GFT Embraces the ‘Dawn’ of FRTB Requirements

Nov 18th, 2015 | Filed under: Regulatory, Regulatory Environment

The Basel Committee is engaged in a Fundamental Review of the Trading Book. Nothing has been finalized yet, but a new report from GFT Group suggests that the outlines of a new regulatory system for banks and their trading books is taking shape. And GFT is enthusiastic about this.Read More


MFS: The Limits of Passive Investing

Nov 15th, 2015 | Filed under: Allocating to A.I., Alpha & Beta

One helpful characteristic of active managers is that, in the words of a newly issued white paper from MFS, they can “avoid taking full market risk, intentionally avoiding companies and segments of the markets where risk is overpriced.” Read More


Millionaires’ Outlook: Still in Positive Numbers

Nov 12th, 2015 | Filed under: Alternative Investments in Context, Business News

Two indexes of confidence, one for millionaires, the other for not-quite millionaires, have returned to the level at which they stood in June of this year, after a summer rise and autumnal fall. A discussion of the arc. Read More


Biggest Mistakes Hedge Fund Managers Make (video)

Nov 11th, 2015 | Filed under: Hedge Funds

What are the two most common mistakes that hedge fund managers make? How to avoid and/or fix them.Read More


Advice for Pension Funds Who May Have Lost Their Way

Nov 10th, 2015 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Newly Added

One panelist said that many pension funds have "lost their way and [gone] to asset allocation instead of focusing on their underlying obligations." Read More


No More Double-speak, Please! 6 Questions You Need to Answer

Nov 9th, 2015 | Filed under: Investor Relations

Guest columnist Diane Harrison looks at the six questions that managers must answer.Read More


M&A: Are the Delaware Courts Becoming Intrusive?

Nov 8th, 2015 | Filed under: Legislation/Court rulings, Regulatory Environment, Relative Value Hedge Funds

In 2014 it seemed possible that investment bankers could shrug off the Rural Metro decision as an anomaly; that is, as an example of how bad cases make bad law. But if a pending decision in the Supreme Court upholds the Chancery Court, they'll know they're dealing not with an anomaly but with a trend.Read More


Due Diligence Idea: Reverse Stultification and Bloat

Nov 5th, 2015 | Filed under: Due Diligence Process, Risk Management & Operations

No one likes those bloated questionnaires. Perhaps twenty-five out of 300 questions are both relevant and important. So, to get better results, customize and re-focus the questions. Read More


Managing a Crisis Before it Manages You (video)

Nov 4th, 2015 | Filed under: Investor Relations, Sales & Marketing in the AI Industry

Cyber attack, SEC letter, hounded by the press... What is a hedge fund manager to do, or not? Read More


The ‘Sin Stock’ Premium: A Neat Illusion Dismantled

Nov 3rd, 2015 | Filed under: Socially responsible investing, SRI and Clean Energy

The theory behind talk of a 'sin stock' premium is straightforward. It isn't at all clear, though, that facts match the theory. Adamsson and Hoepner think not.Read More


The Elusiveness of the Natural Block Trade

Nov 1st, 2015 | Filed under: Business News, Operations, Technology

Trading on natural blocks is a very desirable goal. So why aren't more traders doing it? How hard are they trying? Some questions from a TABB paper, and from an intriguing commenter at TabbForum. Read More


Study Shows Divergence in Fund Expense Disclosure

Oct 29th, 2015 | Filed under: Operations

The analytic company Convergence concludes from its research -- a study of 2,600 ADVs -- that there is a lot of variance in the “depth, breadth, and quality of expense disclosure practices” across fund types and strategies. Read More


How Start-ups Are Influencing Alternative Assets (Video)

Oct 28th, 2015 | Filed under: Seeding/early-stage, Structure of the Hedge Funds Industry

From hedge fund start-ups on the rise to investments moving to private equity and manager compensation, it's all on the table in today's video.Read More


Hedge Funds in a Time of Weakening Recovery

Oct 27th, 2015 | Filed under: Alternative Investments in Context, Finance & Economics, The Global Economy & Currencies

Though the recovery is showing signs of its age and weakness, this is still not the day for which tail-risk funds were designed, the moment of 'extreme distress' and victorious black swans. Thank heavens for that fact, and thank Eurekahedge for the news. Read More