PwC offers a glimpse of a 'day in the life' of a typical compliance analyst in 2015 and again in 2020. As these authors tell it, the day is filled with data, darkness, and drudgery at present, but it will be airy, alliterative, and analytical in another five years.
Bitcoin's price charts nowadays seem to have settled into an equilibrium between $240 and $220 per. But ESMA, and the authorities in Sweden, are both paying attention.
Perhaps the fate of Kweku Adoboli, whose roguish trading at UBS' expense came to light in September 2011, can serve now in the summer of 2015 as a caution for some in the European elite contemplating the long stand-off between Syriza and the Troika.
The creation of a so-called Dead Hand Proxy Put in the Healthways matter was especially egregious because it took place immediately after the board had agreed, under considerable shareholder pressure, that it would de-stagger its elections. The appearance then was that after giving up one defensive moat, the incumbents with the help of lenders immediately created for themselves another.
Two authors at EDHEC remind us that 15% of the assets in any ETF or ETF-like products for European investors were in smart-beta indexed products as of August 2014, and that this amount is growing. They discuss the extent to which investors are pleased with their results.
Andrew Beer continues his discussion on slashing hedge fund fees without burning yourself or your clients.
Banks are in the liquidity transformation business, and that is a critical role. But the ossification of the institutions that perform that role, by tradition, assumption, and concomitant regulation, is a threat to its success.
European mandated hedge funds, benefitting from improved expectations regarding that region, are up 5.54% year to date, says Eurekahedge. Wait: improved expectations? Yes, notwithstanding continued Greek drama.
Trafigura has done quite well from the decline in crude oil prices in recent months. So well, in fact, as to throw a harsh light on a story that appeared in The New York Times in December 2013.
Factor models will evolve as researchers untangle what value is to be attributed to what factor. Model selection, then, has to remain flexible to keep pace with such research, and must of course remain useful for the investment decision makers.
Central bankers now believe that they have to fix as supervisors what central bankers have wrought as money creators. The gnomes of Basel say that the interest rate risk management regime needs work because central bankers have given the world a prolonged period of exceptionally low interest rates, which has inevitably raised the stakes in this area.
Spoofing is probably about as ubiquitous as texting-while-driving. And it is possible to make an example of a spoofer caught red-handed. But it isn't clear what purpose that will serve. The real problem is that a broken market contains a broken set of incentives.
There was some excitement as recently as January 2015 over renewed talk of a Yahoo/AOL deal, but after the bloom finally came off that rose, YHOO settled into a trading range has been roughly from $42 to $46. Faille guesses that there is an opportunity here on the upside of that range, because another suitor is bound to appear.
Much of the ubiquitous talk of the short-sightedness of nasty activist investors or traders is simply confused, analytically sloppy. It is a sort of confusion likely to have negative consequences to the extent that investors/traders themselves come to take it seriously.
Managers who offer funds that provide shorter time frames to investment exits, greater liquidity through a hedge fund structure, and employ the event-driven skill set that identifies and manages an investment portfolio yielding private equity-like returns are finding increased interest from an investment community seeking returns married with reasonable liquidity.
A measured view of the underlying reality of the world market in crude oil suggests that the price may have gone as low as the Saudis want it to go. For traders there may be little if any further gain on the downside.
Judy Collins might suggest looking at risk from ‘both sides now.’ But it appears that according to DB at a critical moment in global financial history, risk existed only to the extent that it worked to enhance the value of DB positions: it didn’t exist in any sense that might have required a haircut.
Guest columnist Don Steinbrugge looks at the value of trend-following CTAs in a portfolio.
The Solicitor General, speaking for the United States, has filed the expected amicus brief in the Google/Oracle showdown. The SG's position is that the Supreme Court should refuse to hear the case so that the lower courts can get back to using what the brief calls the "flexible fair use doctrine" to do justice.
Guest columnist Andrew Smith, CAIA, examines the risks and rewards of investing directly in farmland.
Faille is struck by a brief passage in the recent Nortel decision (the Delaware side of the Delaware/Ontario concord over allocation) that suggests the degree to which the United States dominates the patent-granting as well as the patent-litigating world. Like what the U.K. is for defamation....
This Lancelot's adventures came to a bad end: defeated by the dragon of insolvency. But its official liquidator did win a victory over an investor seeking special treatment via a side letter.
It appears likely that the new index, the Eurekahedge 50, as well as the daily tracker index that has been built around it, will have aspirational significance. It is designed to set a bar that will be very difficult for other alpha seekers to clear, yet easy for replicators to follow.
Guest columnist Andrew Beer takes on hedge fund fees. In part one of the series he looks at the investor aggregation model.
For Faille, the stand-out essay in this collection of case studies, from CNBC's Maneet Ahuja, concerns Marc Lasry and Sonia Gardner, of the Avenue Capital Group. As Myron Scholes says in his afterword to this volume, Lasry and Gardner take returns from those whose demand for liquidity makes them willing to give them up.
A new report by Eurekahedge says that the rise of new products such as hedge fund trackers and related developments since the global financial crisis have set the fund of funds world into a downward spiral whence it has yet to recover.
How long will it take before the world again sees copper at around $10,000 a ton, the going price it touched (though briefly) in early 2011? Perhaps several more years and another full business cycle. There may be a lot of down before an upturn gets us there.
High-stakes litigation between Google and Oracle approaches its resolution at the Supreme Court. For seekers of alpha, this isn't just about what investments to make, but about the way one goes about making them, the very mechanics of trading.
Guest columnist Andrew Beer looks at alpha.
The integration of data isn't fully on the hedge fund industry radar yet. Yet it may be critical to rebuilding manager-investor relations via whiz-bang 21st century technology.
"Vote early and vote often!"
The controversy over corporate governance, and whether the changes favored by reformers show up as superior corporate performance (as measured, for example, by Tobin's q) strikes Faille as dangerously abstract. The only way to get to the pointillist painting is by starting with particular data points.
Intrepid contributor Doug Friedenberg addresses a burning nomenclatural issue for the investment style formerly known as hedge funds and proposes a solution to save the financial system.
What about the Congressionally employed leaker in a matter that looks like an insider tip to hedge fund traders? Is the SEC even allowed to ask? Shockingly, Congress wants special treatment for itself and its staff.
Guest columnist Diane Harrison on investment lessons learned on the golf course.
At this moment, when news from China has turned sober and the monetary/fiscal authorities there seem torn by inconsistent goals, a tweet flutter has reminded us of a boring data-analysis text that was nixed by a publishing house in China for reasons of political sensitivity.
The tear-jerker ending to a famous Broadway musical comes to Faille's mind as he contemplates the latest twist in the struggle over DuPont's board.
A new survey from AIMA seems designed to dispel the idea that alternative finance is a game played somewhere far away from the 'real economy.' The gist of it is that as banks withdraw from lending to that real economy, alternative asset managers, including hedge funds, have stepped in to fill the void.
Guest columnist Andrew Beer examines the "value" of value.
It is of course possible to “question the wisdom of the SEC’s stance on this issue and its fairness to ordinary investors,” said the Judge in the Lanier/HFT decision. But the court isn’t in the business of second guessing the wisdom of regulation. Lanier's claims are dismissed.
SPM "sticks out in [his] mind" as a successful manager with a "17 year track record" with returns in the mid 20s. "Where else are you going to get that?" Well, there is at least one other place that then comes to Brian Shapiro's thoughts: SPM's return compares to the return available from Elliott.
One can argue with Harvey Miller, and with his old-school views about bankruptcy law, but now that he can no longer argue back one should show due deference.
Moody’s Investor Services has assigned a provisional A3 rating to a $750 million multi-currency sukuk issuance program established by Telekom Malaysia Berhad. Meanwhile, also in Malaysia....
A new report finds that firms where current public officials are destined to become employees outperform other private firms by 7.43% per year during the three years before the officials/employees pass from one post to the other. The outperformance is highest in the year immediately before the switch, Justas a cynic looking for corrupt quid pro quos would suspect.
Charles Skorina looks at the top public endowments and discusses performance with Erik Lundberg.
Bill Broeksmit, with whom Tavakoli worked closely at the interest-rate swaps desk at Merrill Lynch in the late 1980s, killed himself in January 2014. The manner of this death, and the circumstances surrounding it, give this book even more gravitas than would a global financial crisis or two.
According to Eurekahedge the hedge fund industry globally returned $54.1 billion in performance gains in the first quarter 2015. This is the greatest first-quarter gain since before the global financial crisis.
Why has Ken Griffin, the founder of Citadel, hired former Fed Chair Ben Bernanke as a Senior Advisor? This decision represents a surprise given Griffin's views on "quantitative easing," views he forcefully expressed a couple of years ago.
Look for the EC sometime in the near future to bring a complaint about the contracts into which Google has entered with manufacturers that require them to construct the handsets in a way that favors Google’s famous search engine [over, for example, Microsoft’s Bing.] But consider that even this preliminary skirmish over comparison shopping might be a bullish sign for GOOG.