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Browse by CategoryHome » Category List » Big Picture
Buffett’s horse race12 June 2008
Comments »Investors pull $6b from hedge funds. So what’s the alternative “alternative”?11 June 2008
If you are a member of the Chartered Alternative Investment Analyst (CAIA) Association, you are probably familiar with the on-going polling conducted by the association each month. Survey topics are primarily focused on those areas for which market knowledge is currently fragmented or quickly evolving. In May, the CAIA curriculum survey focused on the growing area of “alternative alternative” or “alt-alt” investments. While there is no settled consensus on the boundaries of the alt-alt universe, the alt-alt universe is usually taken to include investments outside of traditional securities markets. Examples of alt-alts include weather derivatives, carbon credits, niche assets such as wine and art, litigation claims, insurance claims, and intellectual property rights such as patents.
Comments »ECB touches on some hedge fund myths in new report10 June 2008
The stated purpose of the report is:
As usual, June’s edition (released on Monday) makes some interesting observations about hedge funds and their potential role in “financial crises”… Hedge funds use relatively little leverage
Comments »Leading academics on Freud, finance and “quacks”4 June 2008Richard Taffler on Emotional Finance
Richard Taffler is a finance and accounting professor at the University of Edinburgh with an uncommon command of psychology. He is one of the proponents of a new field of study called emotional finance (see a previous guest posting on this topic). Unlike its close relative “behavioural finance”, Taffler’s “emotional” version focuses on the deep psychological affirmations received by making particular investment decisions. His presentation borrowed from psychoanalysis and was probably the first presentation we’ve ever seen at a hedge fund conference that included the words “Freud”, “Oedipal”, and “infantile”. He puts this framework to use by attempting to explain the collective delusion investors experienced during the dot-com bubble (see his academic paper on the topic – actually quite readable).
Comments »Silos, flesh wounds, the “disintermediation” of poultry, and a call to action4 June 2008More from London (see yesterday’s posting for background)… A pension plan as a financial services firm
It turns out that this view of the hedge fund portfolio as a sort of arm’s length asset manager with only one client can also be applied to the pension fund as a whole. That’s how one major private pension fund described it to a gathering here in London today – as a “financial firm that produces pensions.” This view also has implications for “liability-driven investing” (LDI). Some said that the process of liability-matching and return-enhancing should be kept separate within this financial services firm. For example, one major pension fund here created a team focused on removing interest rate and inflation risk (via a “matching portfolio” designed to match the plan’s future liabilities to pensioners) and a separate team focused solely on trying to squeeze additional returns out of those assets. In true arm’s length fashion, the “return portfolio” is required to literally borrow assets from the matching portfolio – creating a real economic incentive to beat the short-term rates charged on this internal loan.
Comments »Day one from the un-named event in London2 June 2008We report today from a three-day London gathering of some of the world’s largest institutional investors and the hedge funds that serve them (see postings from sister event in Boston last fall). The event focuses not on hedge funds per se, but on how institutional investors use them (portable alpha, fees, alpha/beta separation, 130/30, alternative beta, analytics etc…all the good stuff). In order to create an open atmosphere for candid discussion, organizers have us on a tight leash (there are otherwise no media present here and we can’t even tell you the name of the event). And while we can’t really tell you who said what today, we can pass along some of the major themes from the conference floor. Here’s some of what we heard… Hedge Funds: Innovation from the garage?
Most here held the opinion that “hedge funds” was no longer a useful definition of an asset class. One panellist put it in terms of innovation. He described hedge fund companies as a “platform for innovation”. In an allusion to innovation in the technology sector, he said that “innovation usually happens in garages”, not in large corporations (a clear reference to the oft-cited garage where tech behemoth Hewlett Packard was born - pictured above). In other words, it may be difficult for a large traditional manager to deliver on the major promise of the hedge fund sector - innovation. Issues such as profit- (and risk-) sharing, for example, can often confound the efforts of long-only managers (e.g. banks – see related WSJ piece from last week) to maintain hedge fund programs over the long term.
Comments »Thomas Friedman on alpha/beta separation2 June 2008
Apparently, Thomas Friedman’s seminal book “The World is Flat” has a lot to say about the current state of asset management. Writes Rabovsky:
Comments »Economist article’s “catchy” title may overstate complexity a little26 May 2008
“Catch” #1: If everyone invested in hedge funds, the average hedge fund would not beat the index.
Put forth as a sort of “victim of its own success” argument, this is a restatement of William Sharpe’s oft-cited 1991 article in the Financial Analysts Journal. In a way, everyone is already “investing in hedge funds” since every investor who is not a passive investor necessarily owns a small piece of (pure) active management embedded in their portfolios. So this argument, while entirely valid, isn’t specific to alternative investments. It’s also a “Catch 2%” for mutual funds or a “Catch 50 bps” for active long-only institutional investors. “Catch” #2: Endowments and pensions pride themselves on their ability to earn an illiquidity premium, yet they strive for diversification.
Comments »One of portable alpha’s originators says concept has evolved, in some cases, into something “vastly different”11 May 2008PIMCO’s Chris Dialynas knows portable alpha. In fact, commentators such as author Peter Bernstein generally agree that PIMCO essentially invented portable alpha back in the 1980s in the form of the firm’s “StocksPLUS” and “BondsPLUS” products (see related posting). Dialynas joined PIMCO way back in 1980 - surely before several of PIMCO’s current junior analysts were even born. So when he cautions the world about the movement he helped create, we’re probably best served by listening closely to what he has to say. He is the author of the epilogue to the new book “Portable Alpha Theory and Practice” by Sabrina Callin (see related posting). The chapter is ominously titled “Portable Alpha - The Final Chapter: Schemes, Dreams, and Financial Imbalances: ‘There Must Be More Money’” and it amounts to something of a sanity check on the current state of portable alpha. The entire chapter can be downloaded here at AllAboutAlpha.com. While cautious, Dialynas doesn’t actually question the underlying rationale behind alpha-beta separation or portable alpha itself. Instead, he expresses his concern that the techniques often used to create or isolate pure alpha (leverage and derivatives for example) have led to unacceptable risks to the financial system (think: Richard Bookstaber’s “Demons of Our Own Design” - see related posting). Says Dialynas:
Comments »Mercer: Portfolio management will change more in next 5 years than in previous 3022 April 2008Mercer is excited about the future of portfolio management. On March 21, the LA office of Mercer Investment Consulting gave a presentation to the Arizona State Retirement System called “Investment Industry Trends: Implications for ASRS”. Amongst the discussion of equity markets and interest rates, you’ll find this interesting passage:
A lot has changed in 30 years. Then again, the Time magazine covers from April 1978 do look oddly familiar…
Comments »An inside look at hedge fund deliberations18 March 2008
Tom McGillvray, the Montana Legislature’s representative on the board wins the coveted AllAboutAlpha award for Montana House Member of the Year and shows that we may have been wrong in our assumption that politicians are scared of idiosyncractic risk (see related posting). According to the minutes, McGillvray asked the question that is often ignored amonst the media-driven hype surrounding hedge funds:
Here is how official scribes reported the rest of the deliberations (we’ve added each board member’s day job as background):
Comments »Alpha-centric Newsreel14 March 2008
Morgan Stanley says Alpha/Beta Separation “the way of the future”. The AllAboutAlpha site partner lays out its alpha-centric philosophy telling IPE that the pension industry is about to experience a “second wave” of LDI strategies based on the separation of alpha and beta. Dutch Insurer Aegon splits portfolio into alpha and beta segments are farms each one out to a different manager. According to the firm’s press release, “By managing the parts separately from one another, better risk-return ratios are possible. This way, more sources of value added will be available and a greater focus can be created in the portfolio. Separating the US share portfolio has created an increase of a yearly average of the total return of 2.5% without any risk increase.”
Comments »Canada, Singapore & Norway to US Congress: Relax, we’re not trying to take you over10 March 2008
Last week, the president of this pension plan appeared before a House Financial Services Subcommittee to argue the opposite, that the CPP Investment Board (”CPPIB”) was not, in fact, a sovereign wealth fund. The Canadians appeared alongside representatives from the funds of Norway and Singapore. The CPPIB’s written statement is available in full here. But their basic argument was that the plan was responsible to pensioners (Canada’s 17 million pension plan members) not to the government itself. And unlike funds that are controlled directly by foreign governments, the CPPIB does not re-invest foreign currency reserves. Said the statement:
Many believe that this freedom from government influence is what has allowed the plan to become one of the world’s most innovative institutional investors. When it comes to money, Canadians distrust their government. So pension reforms in the 1990’s were only permitted if the government stepped aside. Continues the written statement:
Comments »Shadwick to Quants: “Financial models should come with health warnings!”9 March 2008Regular readers may remember the name William Shadwick (see related posting). Widely known as the developer of the Omega Function and Omega Metrics®, Shadwick won the 2007 Journalism Award of the Investment Management Consultants Association ,jointly with Ana Cascon, for a paper in which they lifted the veil on some of their powerful new statistics for finance. A prominent mathematician, he was responsible for establishing the Fields Institute for Research in Mathematical Sciences before entering the finance industry in 1998. He is the founder of Omega Analysis, a quantitative research firm in London. Shadwick, who believes in using sophisticated tools and avoiding unnecessary complexity, issues a general warning about the “hidden assumptions” in quantitative models below. He has also been watching the ongoing debate between Harry Kat and Lars Jaeger and tells AllAboutAlpha, “I’m afraid it doesn’t offer much comfort to either the Jaeger or the Kat school…I think that over-modeling has had some severely negative consequences and it’s about time people started to pay more attention to the gap between theory and reality.” That’s all very well in practice, but it will never work in theory!
The title of this piece comes from a joke about a “highly qualified” financial engineer’s reaction to a well-proven trading strategy. It illustrates the tension between theory and practice that we have all seen as quantitative methods become ever more common at trading desks and in investment management. In general, the rise of quantitative tools in finance has been highly beneficial but the widespread use of models has been a decidedly mixed blessing. In science, the constant development of theories expressed as mathematical models to be tested, rejected, confirmed or refined through observation and experiment is the main source of progress in our understanding of the physical world. This process is also crucial for engineering and technology where it is the key to predicting future events and controlling them to our advantage.
Comments »A comment on the (latest) Goldstein case4 March 2008
According to the website Archive.org, which copies websites from across the Internet for historical posterity, the Bulldog Investors website has been in cryogenic suspension since the beginning of last year when the Massachusetts Secretary of the Commonwealth William Galvin accused Goldstein of providing fund information to a non-qualified investor (for the record, he says it was a ”sting” operation). Since then the firm’s website has read simply “Site is currently being updated. Please check back soon. Thank you.” But Archive.org also shows what the site looked like before the latest brouhaha developed. While it’s not immediately clear if this archived version of the website contains the information that raised the ire of the SEC, its existence alone raises certain questions about the ability of the SEC to effectively control information in the Internet age.
Comments »Alternative Viewpoints: “Liquidity Insurance”3 March 2008In December, guest contributor Ranjan Bhaduri, CAIA examined the cost of liquidity by using a simple exercise that he called the “balls in the hat game”. Bhaduri argued that illiquidity - a source of excess return - is often confused with “true alpha”. Today Konstantin Danilov, CAIA, of Bank of America proposes a new type of security that could be used to hedge against the possibility of an illiquidity crisis. Danilov conducts buy-side manager research at BofA. Prior to this, he was a trader at Cantella & Co. He is also a member of the Program Subcommittee for Alternative Investments and Hedge Funds of the Boston Security Analysts Society. His guest contribution below is the latest in a monthly series featuring members of the Chartered Alternative Investment Analyst (CAIA) Association. “Liquidity Insurance”
“Our current system of levered finance and its related structures may be critically flawed. Nothing within it allows for the hedging of liquidity risk, and that is the problem at the moment.”
Liquidity is a topic that is brought up often in the wake of a financial crisis. The crash of 1987, LTCM, Amaranth, and the current sub-prime crisis are all examples of the devastating impact of illiquidity. Unfortunately, it is a factor that eludes the most risk management tools and risk/return models in modern financial theory. For example, Value-at-Risk (VAR) and “portfolio insurance” largely ignored illiquidity (or “assumed” it away) and we were left with the consequences.
Comments »Why the common expression “all correlations go to one” may be overstated28 February 2008
Since 1987, the term “correlations go to one in times of stress” has become axiomatic in financial markets. But does research actually back up his common assumption? In a January research note to clients (“Stress Risks within Asset and Surplus Frameworks” – available here at AllAboutAlpha.com with free registration), Morgan Stanley’s Marty Leibowitz and Anthony Bova take a good hard look at this phenomenon. According to their report:
Comments »Does the “wisdom of crowds” produce alpha?10 February 2008
One panel that raised a lot of interesting questions about the nature of alpha was a panel discussion on “Collective Money Management”. For the uninitiated “collective money management” refers to networks of investors who pool their ideas together to come up with what is hoped to be the best trades. Call it Facebook meets E*Trade I suppose. Examples include Marketocracy, PredictWallStreet, Zecco, Cake Financial, Socialpicks.com, and Covestor. These web sites were billed in the official programme as being the “antithesis” of the stock market – places where people freely share ideas in the hope that they will benefit by association with the network. But while many emerging open source business models can seem counterintuitive, the idea that investors want to share their ideas isn’t realy counterintuitive or antithetical at all. In fact, it’s in perfect keeping with the spirit of the market. If an investor buys an undervalued stock, it’s actually in his best interests to tell others about his thesis since this will put upward pressure on the stock.
Comments »Life in The Big Alpha6 February 2008
In other words, according to Sapra’s analysis, the Giants may have had alpha in the cards all along. (Note to self: listen to whatever Steve Sapra has to say from now on…) But the New York alpha didn’t end there. Alpha Male spent the next morning at a conference dedicated to “finding alpha in a world of commodity data” (O’Reilly Money:Tech). A predominantly tech crowd of over 400 gathered at the Waldorf Astoria to discuss Web 2.0 tools to “find alpha”. That afternoon, I high-tailed it up Park Avenue to moderate a panel at the Battle of the Quants event called “Extracting Alpha through quantitative models in hedge funds“. While the audiences at these events was different, the objectives, ideas, and even some of the sponsors were similar. Both events were aimed squarely at the application of creativity and emerging ideas to the (supposedly mature) field of asset management.
Comments »Alternative Viewpoints: Réplication de fonds de couverture4 February 2008As we pointed out in a posting a couple of weeks ago, there seems to be a little je ne sais quoi in the water in Montreal that breeds hedge fund replication providers. Today, Montreal-based Pierre Saint-Laurent, head of the Canadian chapter of the CAIA Association weighs in on why the city founded by sailors in 1642 is now making waves in the hedge fund world. Why Montreal is such a hotbed of hedge fund replication research
Special to AllAboutAlpha.com by: Pierre Saint-Laurent, CFA, CAIA, president of AssetCounsel Inc. and head of the Canadian chapter of the CAIA Association Alternative investments, and hedge funds in particular, have raked in the assets so far in the 21st century because of low returns from traditional strategies, pension fund deficits, an urge to diversify (and maintain low correlations even when all traditional asset classes spike, such as in the tech meltdown) and somewhat of a ‘nothing works anymore’ mindset. Indeed, investors seem to like alternatives so much that they are willing to deal with lower transparency, hard-to-explain strategies, and (arguably) higher fees. There’s a reason for all that: alternative asset managers, and hedge fund managers in particular, need the secrecy and privacy to move quickly and efficiently.
Comments »New research on private equity surprises even some of the experts27 January 2008
But both of these contentions have been called into question by a new research report commissioned by the World Economic Forum and released in Davos on Friday. The report was led by Harvard’s VC guru Josh Lerner, was advised by a group including hedge fund demigod David Swensen of Yale and, according to its introduction, represents “an unprecedented endeavour linking active practitioners, leading academics, institutional investors in private equity and other constituents (such as organized labour) and boasts involvement from many parts of the globe.” The full report, “The Global Economic Impact of Private Equity”, is available here. It’s highly comprehensive to say the least and weighs in at 189 pages. But if you don’t have several hours to kill, you can always read the key findings in a press release available here. Lerner told a panel audience in Davos on Saturday that academic research on private equity hadn’t been as extensive in recent years as it had back in the 1980’s (full 70-minute panel video, official summary). Hence the impetus for this new round of papers and case studies. Perhaps due to this dearth of contemporary research, Lerner said he was surprised by a few of the report’s findings. Said Lerner:
Comments »Davos “Systemic Financial Risk” panel: most apropos in modern history25 January 2008
The WSJ reports, “Société Générale and the U.S. bankers feared on Wednesday that shares of the French bank would fall sharply when it disclosed the huge loss from the alleged rogue trader.” Fast forward now to Thursday 11am Eastern Time (5pm in Davos). JP Morgan’s CEO, James Dimon is a co-chair of this year’s Annual Meeting of the World Economic Forum - and a member of one of the most apropos panels of all-time: ”Systemic Financial Risk”. Dimon was likely one the bankers whom the WSJ suggested may have had a late night on Wednesday. According to the webcast of this session, moderator James Schiro, CEO of Zurich Financial, kicked off the proceedings by saying:
Comments »Bookstaber’s pre-boarding call for the “flight to simplicity”10 January 2008
The labor of love now has 55,000 copies in print and has received accolades from The Economist, Business Week, Forbes, and (most prestigious of all) AllAboutAlpha.com. Bookstaber was in Toronto earlier this week addressing a sold-out event organized by AIMA (The Alternative Investment Management Association). I had the chance to join him for dinner before his speech and found him to be a casual and disarming kind of guy who is equally comfortable discussing championship dog breeding as he is dispensing sapient advice on the global financial system. He gives credit to others - particularly an editor at The Economist - who have recently advocated a “flight to simplicity” for adroitly summarizing the main idea behind his book. Bookstaber basically says that one can’t fight complexity with more complexity. Adding ever more complicated financial regulations can (and will) have unknown and unintended consequences for the functioning of capital markets.
Comments »Ineichen looks back (way back) to see future26 December 2007
Ineichen presented his latest ideas in a conference hosted by UBS’s “Alternative Investment Solutions” team in November. His notes were assembled into a document that he passed along to us last week and which are available here. For anyone looking for a thought-provoking “big picture” view of financial history, this will surely be of interest. For example, to make a point about time frames for risk analysis he presents a timeline that begins at the Big Bang and ends with the implosion of the sun into a white dwarf. That’s a 21 billion year window. Talk about long-term horizon. He makes a point that we also raised last week in our discussion of “black swans” – that volatility is itself volatile. Says Ineichen:
Comments »The expanding (alpha) universe23 December 2007
We tackled this question about a year ago in relation to a seminal white paper written by Lars Jaeger and Christian Wagner (see related posting). But we thought it would be interesting to revisit this given the myriad of new estimates that have recently come out on the size of the hedge fund industry. To get to the bottom of this, we went right to the expert on the topic, Hilary Till of Chicago-based Premia Capital Management. Till wrote a paper back in 2004 for both the Journal of Alternative Investments and the AIMA Journal on the theoretical capacity of the hedge fund industry. The AIMA Journal version of the piece was called “The Capacity Implications of the Search for Alpha” and Jaeger and Wagner actually cite it when establishing a conceptual framework on hedge-fund capacity. In a summary of 2004 article (available here) Till says:
Comments »Crowded hedge fund trades: Why the rules changed in ‘0720 December 2007
Position-level data may indeed be next to impossible, but not quite. In the United States, hedge funds are required to file a quarterly form called a “13f” that contains their common shares, convertible preferred shares and convertible bond holdings (long positions only). While the data is somewhat stale (managers have 45 days after quarter-end to submit the report), it provides some interesting insight into so-called “crowded” hedge fund trades. In a report issued to clients on August 27, 2007, Thomson Financial analyzed the largest US holdings of the top 25 biggest hedge funds in the United States. Collectively, this group managed slightly over US$400 billion. According to Thomson, over 3% of these assets were invested in Sears Holdings (although they acknowledge that most of that may be ESL). The list of 25 also includes names such as Autozone, CVS, Google, Alcoa and RIM.
Comments »Deutsche Bank puts it all in perspective20 November 2007Speaking of “active alternatives”, Deutsche Bank’s alternatives group released a lengthy report recently on the four pillars of alternative investments, hedge funds, private equity, infrastructure, and real estate (commodities is arguably the fifth). The report provides an overview of each, including market sizes and growth. The charts below from the report seem to corroborate what Casey Quirk has to say above. Hedge funds…
Private equity…
Real estate…
The report also contains some data on infrastructure if that’s your thing.
Comments »“The more we get together, together, the happier we’ll be…”30 October 2007
However, “convergence” between different quarters of the asset management industry hasn’t always come as naturally. Now a report released this week by KPMG and UK-based consultancy CREATE says that although convergence is a new subject, it is already a key part of the curriculum. Regular readers may remember the last report from this prolific partnership titled “Hedge funds: a catalyst reshaping global investment” (see related posting). Well, apparently the “catalyst” is catalyzing nicely. The newest edition, “Convergence and divergence: New forces shaping the investment universe” shows that hedge funds have stirred the asset management pot. The report basically makes the case that the asset management industry is re-inventing itself through a process of creative destruction. Here are a few of the report’s 12 key themes:
Comments »Canada: “Come for the gold, but stay for the alpha”11 October 2007
Perhaps it’s no coincidence that this year also marks multi-decade highs for two of Canada’s favorite exports: gold and oil. But Phil Schmitt, Chairman of AIMA Canada told the audience that there were plenty of untapped hedge funds in Canada that do not rely on the ubiquitous “resource beta”. Essentially Schmitt’s message to international investors is “come for the gold, but stay for the alpha”. (see related article) And speaking of alpha. The good folks at Hedge Funds World dedicated much of the afternoon of day one to “Alpha Beta Portfolio Construction”. Here are some notes from the floor:
Comments »Now Asia becoming AllAboutAlpha10 October 2007
Companies like Deutsche Bank (and AllAboutAlpha site partner Morgan Stanley) are the engineers who give life to the solutions advocated at AllAboutAlpha.com. So we were very interested to hear how the alpha-centric revolution was going to actually be implemented. Charles-John Donley (”C.J.”), DB’s Managing Director of the Institutional Client Group within Global Equity Derivatives here in Asia and Colin Grassie, Deutsche Bank’s CEO of “Asia (ex-Japan)” hosted the events in Singapore and Hong Kong respectively. Asia is currently responsible for about 10% of AllAboutAlpha.com traffic (60% is US and 25% is from Europe). But if Donley and Grassie are even half-right about the burgeoning demand for more innovative portfolio construction in this market, we’ll have to translate AllAboutAlpha.com into Mandarin pretty soon. | ||||||||||||||||||||||||||||||||||||||||
A lot has been written in the past few days about Warren Buffett’s bet with hedge fund firm Protege Partners that the firm couldn’t beat the S&P 500 over 10 years. We’ve taken an interest in this story because it hits at the heart of the active/passive (alpha/beta) debate. After reading various media interpretations of the bet and the resulting comments from readers at several websites, we offer the following observations:
There are 
Every 6 months, the European Central Bank issues a state of the union report on the financial system called the “Financial Stability Review” (
Two sessions featuring academics today illustrated why this is one of our favourite events on the pro-am hedge fund conference tour (see 
As some pension funds begin to shift from funds of funds to single-manager hedge funds, they usually create what amounts to their own internal fund of funds. The only difference between this fund of funds and a “real” fund of funds is that the pension has only one client: its own pension plan. 
After years of steady growth, it’s no surprise that traditional long-only money managers have been licking their chops over the potential to offer hedge funds. Meanwhile, hedge funds have been strangely attracted to the gazillions of dollars under management by the long-only managers. Today in London, managers and investors debated the relative merits, not of hedge funds and long-only funds, but of hedge fund management companies and long-only management companies. While many people can tell you the difference between a hedge fund and a traditional long-only fund, few seem to agree on the unique characteristics of each type of company.
Watson Wyatt consultant Janet Rabovsky passes along 
This week’s 
Pensions & Investments 
Here is a sample of the news stories we didn’t get a chance to explore in detail this week. As usual, all of them can be found on the Alpha-ticker above or in the news items section of AllAboutAlpha.com (free registration may be required for a few of these).
On January 31, we 
Special to AllAboutAlpha.com by: Dr. William Shadwick, Omega Analysis
Phillip Goldstein is at it again. The guy who single-handedly vacated the SEC’s hedge fund regulation rule has now threatened to sue his arch nemesis if it doesn’t lift its ban on hedge fund advertising immediatley. According to 
Special to AllAboutAlpha.com by: Konstantin Danilov, CAIA, Bank of America
In his book “A Demon of Our Own Design” Richard Bookstaber describes how the breakdown of basic market physics during Black Monday meant that “all stocks moved together” (
The intersection of finance and technology is getting crowded. Along with information aggregation services and social investing networks, today’s the O’Reilly MoneyTech conference in New York featured celebrity financial bloggers. Barry Ritholtz (
It’s been all about alpha in New York City this week. To begin with, the NFL’s New York Giants celebrated their Super Bowl victory with a ticker tape parade on Tuesday. You may recall that on Sunday, January 13, 
Skeptics often content that private equity (and hedge fund) “locusts” are holding companies for ever-shorter periods of time in an effort to extract value and high-tail it out of an investment before things go south. Some, particularly trade unions, also believe that private equity take-over targets are destined to lose jobs following an acquisition (
Official news of the SocGen fiasco broke on Thursday, January 24 (See 
It was 8 years in coming. An idea that began as a set of notes back in 1999 slowly and methodically grew over the years to eventually become a manifesto of modern risk management. According to author Richard Bookstaber, “A Demon of Our Own Design” began as a labor of love. It seems that the result represents a sort of catharsis - therapy for a hedge fund insider who has been a first-responder at the scene of some of history’s most calamitous financial crashes. 
With 2007 about to go into the history books, we wondered how the year compared to others in the annals of financial history. One of the keenest observers of financial history has got to be UBS’s Alexander Ineichen. You may remember Ineichen for his 2006 tome Asymmetric Returns (see AllAboutAlpha reviews: parts 
Apparently, the universe is big. Really big. We learned this week that it holds about 10^80 atoms (
Earlier this week, we told you about a 
From an early age, kids are taught to cooperate, to share toys, to take turns, and to celebrate their differences by converging into a circle each morning. 
Continuing our conference-a-continent tour, we attended the inaugural Canadian edition of the venerable “Hedge Funds World” franchise this week in Toronto. After creating a “Hedge Funds World” for what seems to be every possible region and city on the planet (New York, London, Dubai, Hong Kong, Singapore, Tokyo, Miami, Cape Town, Zurich, Stockholm, Madrid, Hoboken, Burma, Pyongyang, Falkland Islands, North Pole…okay, not Burma) attendees at this event were pleased to finally join the global party.
Hundreds of asset managers and end investors met in Hong Kong last Friday to hear the alpha-centric views of derivatives experts and economists from Deutsche Bank along with the 1X0/X0 opines of your humble scribe. The event was the second in a two-show tour that started in Singapore on Wednesday.