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Guest Posts

The Harvard Management Company: Size Really Does Matter

Sep 28th, 2016 | Filed under: Allocating to A.I., Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

In asset management, as in other endeavors, size really does matter. Bigger is better.  But growth in AUM drives growth in headcount and complexity; and that can overwhelm existing structures and challenge management. A few weeks ago in “Crunch Time for the Harvard Endowment” we referred to HMC’s hunt for aRead More


ATTACK MARKETING USING THE RULE OF 150

Sep 19th, 2016 | Filed under: Investor Relations, Newly Added, Sales & Marketing in the AI Industry

By Diane Harrison The Rule of 150, first posited in the 1990s by British anthropologist Robin Dunbar, refers to the maximum number of people with whom any person can build meaningful relationships.  While there appears to be a spirited debate over the actual figure (100? 150? 250?), the general assumptionRead More


Crunch Time for the Harvard Endowment

Aug 14th, 2016 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added, Personalities in AI

By Charles Skorina The hunt is underway for a new CEO at the Harvard Management Company.  And chairman Paul Finnegan and his board intend to get it right this time. Counting interims, they’ve now had six CEOs at their shop since Jack Meyer departed in 2005, and mostly mediocre returns to show for it. AfterRead More


Active vs. Passive: A 3-Club Headwind

Aug 10th, 2016 | Filed under: Allocating to A.I., Alpha & Beta, Benchmarking & Performance Attribution, Newly Added, The A.I. Industry

By Scott Opsal Relative Performance Actively managed funds have recently underperformed passive indexes. As a result, fund inflows and deposits have favored passive funds. Active Vs. Passive Return Patterns Are Cyclical Our research suggests relative returns between active and passive are cyclical, depending on the market environment. We examine severalRead More


5 Reasons Why Emerging Managers are Worth a Look

Aug 8th, 2016 | Filed under: Industry Size & Managers, Newly Added, Sales & Marketing in the AI Industry, Seeding/early-stage, Structure of the Hedge Funds Industry, The A.I. Industry

By Diane Harrison Beware the industry naysayers who proclaim hedge funds aren’t worth their salt–fees/risk/terms/etc. Sweeping generalizations may make good headlines, but they are invariably proven false by the minority that refutes them through action/statements/results/etc. Investors who take the time and effort to look under the ‘hedge fund hood’ canRead More


The Harvard Management Co.: Time for some creative destruction?

Jul 18th, 2016 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina It’s been 10 years now since Jack Meyer stepped down as head of Harvard Management Company, while David Swensen – now in his 31st year – has carried on at the Yale Investment Office. Each endowment has pursued its own distinctive management model: HMC with its “hybrid” internal/external approach,Read More


All About Alpha: Dawn of a New Decade

Jul 4th, 2016 | Filed under: Industry Size & Managers, Newly Added

By Chris Holt Today marks the dawn of a second decade for this venerable blog.  AllAboutAlpha published its first article almost exactly 10 years ago today, on July 4, 2016.  Since then, this website has published an article a day for 2,600 consecutive business days.  That’s about 1.3 million wordsRead More


Welcome to Low-Return World: Will Chief Investment Officers and Trustees be ready?

Jun 22nd, 2016 | Filed under: Infrastructure, Institutional Asset Management, Institutional Investing, Newly Added, Operationally Intensive Real Assets

By Charles Skorina For executive recruiters like us, that’s a question we’ll have to wrestle with as we present candidates to the boards of institutional asset managers. Two of our investment-management village elders–Bill Gross and Burton Malkiel–say we’re staring down the barrel of a low-return decade.  They’ve been around for aRead More


The hedge fund fee structure consumes 80% of alpha

Jun 20th, 2016 | Filed under: Fees, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

By Andrew Beer Investors bear the risks and managers reap the rewards. The average hedge fund earns 1.67 per cent in management fees and is paid 18 per cent of investment profits annually. Over the past ten years, investors paid away half of pre-fee returns. Even more troubling is theRead More


Foresight is Better than Hindsight

Jun 15th, 2016 | Filed under: Investor Relations, Newly Added, Sales & Marketing in the AI Industry

By Diane Harrison The Lake Wobegon Effect—where, according to its creator, Garrison Keillor, ‘all the women are strong, all the men are good looking, and all the children are above average’—relates to the tendency to overestimate one’s achievements and capabilities in relation to others. Lake Wobegon seems to be aliveRead More


Allocating to Risk-Managed Strategies: Reasons to Consider Hedged Equities

Jun 13th, 2016 | Filed under: Allocating to A.I., Asset allocation, Asset Allocation Models, Equity Hedge Funds, Hedge Fund Strategies, Hedge Funds, Newly Added

By Calamos Investments Team Introduction In this segment of our series on Allocating to Risk-Managed Strategies we explain the benefits of hedging equities in a portfolio or investment strategy. You’ll learn: How institutional investors effectively employed a hedged equity strategy during the economic recovery period beginning in 2010. Why theRead More


SLAM Wars: The Flow Awakens Ranking Asset-Manager Flows & Profits

Jun 6th, 2016 | Filed under: Asset Managers, Endowments & Foundations, Family Offices, High-net-worth investors, Industry Size & Managers, Institutional Asset Management, Institutional Investing, Newly Added

By Charles A. Skorina As recruiters we work both sides of the investment-management street: serving for-profit money managers and not-for-profits like foundations and endowments.Fee-based publicly listed asset managers, especially the big ones, are newsworthy because they invest a lot of money for a lot of customers, including non-profits investors.  There’sRead More


Best Practices for Private Equity Sponsors in an Age of Increasing Scrutiny

May 23rd, 2016 | Filed under: Benchmarking & Performance Attribution, Newly Added, Other Issues in Private Investments, Performance, Analytics & Metrics, Private Equity, Private Investments, Risk management, Risk Management Strategies & Processes

By John Czapla, Parag Patel and Shane Newell, Valuation Research Corporation As the demand for transparency rises for private equity and hedge funds, the spotlight is increasingly focusing on valuation practices. There are an important number of reasons why the valuation process has become important, and they are essential forRead More


Wrangling the Unicorns: Yale celebrates their VC heroes

May 15th, 2016 | Filed under: Allocating to A.I., Endowments & Foundations, High-net-worth investors, Institutional Asset Management, Institutional Investing, Newly Added, Private Equity, Private Investments, Venture capital

Yale, in their 2015 annual report issued this month has broken out their private equity allocation into two distinct segments: Leveraged Buyouts and Venture Capital.  See: This is the first time in many years they’ve offered that level of detail.  And they’ve given the whole report a VC-and-entrepreneurial theme, supplementing theRead More


Convertibles as a Risk Management Tool in Emerging Markets Portfolios

May 2nd, 2016 | Filed under: Hedge Fund Strategies, Hedge Funds, Newly Added

By Nick Niziolek, CFA In a recent post titled The Convertible Bond Trifecta, my colleague Scott Henderson outlined several market factors that appear supportive of convertible bonds after the volatility that started 2016. This post addresses a different role for convertibles: their use as a risk management tool within portfoliosRead More


The Skorina Report: Russell Read and the Alaska Permanent Fund

Apr 27th, 2016 | Filed under: Newly Added, Personalities in AI

By Charles Skorina Russell Read has just been appointed chief investment officer of the $52 billion Alaska Permanent Fund Corporation (APFC), and he’s headed for a state in crisis. The collapse of global oil prices has put a big squeeze on all of the world’s oil producers; and in Alaska, where oilRead More


The Skorina Report: Why You Can’t Clone Yale

Apr 5th, 2016 | Filed under: Allocating to A.I., Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina   Can you copy great endowment investment performance?  The Yale endowment, for example? Reverse-engineering a good performer is probably achievable.  The key attributes can often be identified and, to some extent, duplicated. But can you replicate great performers? That’s a much taller order.  There’s always something slightlyRead More


The Skorina Report: A Conversation with Sam Gallo, CIO, University System of Maryland Foundation

Mar 28th, 2016 | Filed under: Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina My friend Sam Gallo has just finished the two-year executive MBA program at the University of Chicago (Chicago Booth School of Business).  He graduates this month with a stellar academic record after commuting every other weekend for two years from D.C. to Chicago while running the MarylandRead More


The Convertible Bond Trifecta

Mar 21st, 2016 | Filed under: Alpha Strategies, Hedge Funds, Newly Added

By Scott Henderson, CFA, CIMA®, CMFC, Calamos Investments Convertible securities have not been immune from the volatility that has roiled risk assets in 2016. However, we believe the volatile start to the year has set the stage for longer-term opportunities. A convertible bond can be thought of as a corporateRead More


Coming Up Short in 2016

Mar 14th, 2016 | Filed under: Hedge Fund Industry Trends, Newly Added

January’s wild ride set the tone for a jittery year in market performance. While the first quarter of 2016 has managed thus far to recover from its precipitous initial swoon, investors aren’t feeling comfortable with the current state of affairs.  Fed policy regarding interest rate direction, a strong dollar, andRead More


When an allocator calls: Best Practices for a CTA’s back office

Mar 9th, 2016 | Filed under: Commodities, CTA, Hedge Funds, Investing in Commodities, Macro and Managed Futures Funds, Newly Added, The A.I. Industry

By Dana Comolli, president, DMAXX LLC Every trader who has tried to raise money knows the drill from investors: yes we want to know about your performance, but also, explain in detail your back office (infrastructure, organization). Most allocators come with pages of checklists and expect the manager to beRead More


The Skorina Report: Who are the Best Institutional Investors? It’s Not That Simple

Feb 22nd, 2016 | Filed under: Asset Managers, Institutional Asset Management, Institutional Investing, Newly Added, The A.I. Industry

By Charles Skorina There is simply no place like New York for the depth and breadth of exceptional investment professionals. Yet with all this talent, the challenge of building superior investment teams that can endure and outperform over a decade or more is daunting and seldom achieved. Consistent, multi-decade superiorityRead More


Gamma Trading: Why Big Market Swings Can Be Good News

Feb 17th, 2016 | Filed under: Equity Hedge Funds, Hedge Fund Strategies, Hedge Funds, Newly Added

By Jason Hill, SVP and David O’Donohue, VP, Calamos Investments When it comes to your investment portfolio, volatility can be an unsettling word. For strategies that utilize convertible arbitrage though, market volatility can be a welcomed phenomenon, as we may be able to profit from it through what is referredRead More


Alternatives Appetite 2016: Bulk Up or Slim Down?

Feb 8th, 2016 | Filed under: Hedge Fund Industry Trends, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

By Diane Harrison January started the year off with a bang, as global markets were rocked by Fed tightening, China crumbling, and lots of political mumbling. Prices swooned across the board and spooked investors, who strained to make sense of a financial foundation that seems to be built on sand.Read More


Alternative Multi-Manager Mutual Funds: What’s the Value Proposition, Again?

Jan 25th, 2016 | Filed under: Alternative Mutual Funds, Fees, Hedge Fund Industry Trends, Liquid Alternative Investiments, Liquid Alts, Newly Added, Other Topics in A.I., Retail Investing, Structure of the Hedge Funds Industry

By Andrew Beer New products are sold on a story.  For alternative multi-manager mutual funds – most of which have launched since 2012 – the pitch goes something like this:  we can find top tier hedge fund managers to run various alternative investment strategies – equity long/short, relative value, macro,Read More


Michigan State University Hires its First Chief Investment Officer

Jan 11th, 2016 | Filed under: Institutional Asset Management, Institutional Investing, Practitioners, Who's Who

By Charles Skorina   Michigan State University announced the appointment of Philip Zecher as Chief Investment Officer on Friday, December 18th, 2015. Philip Zecher has just been appointed MSU’s first-ever chief investment officer, reporting directly to Dr. Lou Anna K. Simon, MSU’s president. The trustees announced the appointment on Friday and PhilRead More


The Global Economy in 2016 – 5 Key Trends

Dec 28th, 2015 | Filed under: Finance & Economics, Newly Added

By Shane Brett Every year Global Perspectives publishes its predictions of the 5 keys trends we see impacting the global economy in the year ahead. For many parts of the world economy 2016 could be summed up in 4 words – more of the same. US powers the Global EconomyRead More


Alternative Asset Managers Feeling the Burn

Dec 17th, 2015 | Filed under: Industry Size & Managers, Newly Added

By Diane Harrison As another year draws to a close, emerging hedge fund managers wrestle with how to grow their business to the next level, including how to survive another year of cutthroat competition for attracting investors. While the answers to this riddle can be numerous and complex, I thoughtRead More


The Skorina Report: The ‘hoarding’ hoax, ‘excessive’ private-equity fees and other confusions

Nov 2nd, 2015 | Filed under: Equity Types of Private Equity, Private Equity, Private Investments

Guest columnist Charles Skorina looks at accusations of endowments "hoarding" money on one hand and paying "excessive" fees to private equity managers on the other. Is it time for an intervention?Read More


Biggest Casualty of Crude Oil Price Collapse?

Jan 12th, 2015 | Filed under: Alternative energy

Traditional energy and alternative energy clash as crude prices fall.Read More


China’s Oil Giant At Center Of Corruption Probe

May 27th, 2014 | Filed under: Energy

Oilprice.com's Ky Krauthamer looks at corruption in China's oil industry.Read More


Funds of Hedge Funds May Be Down, But Don’t Count Them Out

Dec 6th, 2012 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, High-net-worth investors, Institutional Investing

Away from the bleak headlines, the funds of hedge funds industry is quietly reinventing itself.Read More


A Lack of Rigor in ‘The Hedge Fund Mirage’

Nov 15th, 2012 | Filed under:

Andrew Beer looks at the underpinnings of The Hedge Fund Mirage.Read More


Hedge Funds Must Embrace the New Communications Landscape Post-JOBS Act

Oct 30th, 2012 | Filed under:

Nick Lawler on the JOBS Act.Read More


Alpha Hunters: The Macro View

Apr 24th, 2012 | Filed under: Alpha Hunters, Alpha Strategies

By John Brynjolfsson, Armored Wolf The Armored Wolf investment team held its Secular Forum in late March. This is an annual opportunity to step back and discuss major themes in the upcoming investment environment. This was an effort to identify the dominant underlying forces likely to drive asset prices .Read More


Democracy in Greece

Feb 13th, 2012 | Filed under:

Letter to the Editor –John Brynjolfsson The intransigence of the Greek populace is no secret, or covert underground fringe movement. It’s near universal, but for 199 parliamentarians. Though the EU is trying to set up escrow accounts and other controls, it is time for EU to openly acknowledge what EU’sRead More


Alpha Schmalpha: It’s not just ‘Greek’ to investors

Aug 23rd, 2011 | Filed under: Hedge Fund Industry Trends

What's it all about, this alpha? And for that matter, where is it? Dr. Bob Swarup tackles the real meanings of alpha and beta.Read More


Hedge Fund Indexes Learn to Walk Upright: Introducing the Hedge Fund Barometer

Jun 30th, 2011 | Filed under:

Hedge fund indexes have been around for as long as there have been hedge funds to index. As the industry evolves, so too the way it is measured must change. The Hedge Fund Barometer intends to change the way we measure hedge fund performance.Read More


A Pared-Down Approach to Stock Picking

Mar 25th, 2011 | Filed under:

Special to AllAboutAlpha.com by: Paul Cantor, CFA, portfolio manager and Diane Harrison, Managing Director, Hercules Trading Fund, LLC Investors looking for opportunities in the hedge fund market first need to consider an overall strategy approach. The typical ‘Big Three’ are: 1) Directional, 2) Market-Neutral, and 3) Event-Driven. Directional strategies seekRead More


Is now a good time to jump into the hedge fund waters?

Feb 14th, 2011 | Filed under:

Sure it's hard to start a hedge fund these days. But for some that obviously doesn't matter.Read More


SEC Insider Trading Enforcement: A New Foreboding Tune For Investors

Nov 22nd, 2010 | Filed under:

By: Mikhail Iliev, head writer of Who’s In My Fund? Back in January, AAA asked whether the significant increase in proposed Securities and Exchange Commission examinations heralds a new era for hedge fund oversight. The question looks to be answered soon and most likely in the affirmative – at least inRead More


Switching Horses Mid-Race: How to know when riding different betas creates alpha

Aug 10th, 2010 | Filed under: Performance, Analytics & Metrics

Alpha doesn't always have to come from security selection - as today's guest contributor points out.Read More


How much wood would a woodchuck allocate if a woodchuck would allocate part of his portfolio to wood?

May 19th, 2010 | Filed under: Commodities, Institutional Investing

As alternative investors know, money does grow on trees after all. The trick is: how to harvest it. Read More


What NASCAR Can Teach Us About Return Persistence

Apr 28th, 2010 | Filed under: CAPM / Alpha Theory

At the very least, NASCAR and Formula One share two things in common with the alternative asset management industry...Read More


“Alpha Extension” extended to emerging markets

Feb 28th, 2010 | Filed under:

Advocates of “short-extension” or “alpha-extension” strategies such as 130/30 funds often point out that traditional long-only managers are only able to bet against a stock by as much as that stock represents in the benchmark index.  After all, they argue, you can do no more than simply deciding not toRead More


Comment: “Risk-based compensation” a more equitable approach

Jan 14th, 2010 | Filed under:

The past few years have seen discontent about return-based hedge fund fees growing amongst investors. Here's a proposal from one manager that attempts to balance both risk and return.Read More


Alternative Viewpoints: Due to funds’ lack of persistence, the Sharpe ratio has no validity as an investment decision tool

Oct 29th, 2009 | Filed under:

There have been many studies on hedge fund manager return “persistence”.  Persistence, after all, is a necessary precondition for the existence of alpha.  Like alpha itself, you might expect that the persistence of a good Sharpe ratio may be possible in less mature (more informationally inefficient) markets.  But a newRead More


A Reader Comments…

Oct 2nd, 2009 | Filed under:

The hedge fund space has become "contaminated", says this AllAboutAlpha.com reader.Read More


Alternative Viewpoints: Using the Modified Sharpe & Information Ratios

Sep 2nd, 2009 | Filed under:

In this month's "Alternative Viewpoints" column, BNY Mellon's Neil Kotecha explains one of the reasons why the Sharpe Ratio isn't so sharp after all.Read More


Prominent researcher finds “Extreme Value Theory” can turn VaR into a better crystal ball

Jun 29th, 2009 | Filed under:

Who knew "Value at Risk" calculation was an extreme sport? Sure, it's not base jumping...But at least one prominent mathematician turned investment researcher says it's not far off. Read More