Hoarding bad news bears this meaning: at some point a lot of bad news is going to break through the informational dam all at once, producing a flood, that is, a firm-specific crash.
The SEC says that it does not believe that “merely” providing analysis or information to the active members of a policy-making committee within a fund management firm is the same thing as making policy for the firm. That seems likely to provoke some wonderful hair-splitting disputes going forward.
Why convert a hedge fund to a mutual fund instead of establishing a stand-alone vehicle available to retail investors that could invest alongside the existing hedge fund?
AIFMD brings many changes to the table. Grant Thornton Ireland has issued a new paper looking at the ramifications.
Financial firms still have people manually implementing Excel spreadsheets in connection with various mandated stress tests, a fact that suggests to a Celent research director that Fred Flintstone runs the back office.
Cutting latency in any one layer is a task distinct from that of cutting it in any of the others. For the physical or interface layer (the ground floor of our ziggurat), optimization involves fiber optics and efficient queue management.
Farallon founder and Koch Brothers at odds over energy. Daniel J. Graeber, Oilprice.com, looks the issues.
In June 2010, pursuant to an order of that BVI court, the court-appointed liquidators of a Madoff feeder fund in liquidation in BVI petitioned the bankruptcy court in the Southern District of New York to recognize those proceedings as the foreign main proceeding under Chapter 15.
U.S. Energy Administrator Adam Sieminski speaks candidly about the U.S. energy opportunities with James Stafford, Oilprice.com.
Four researchers have developed an "event-based" understanding of Liquidity, measuring it as a characterization (from 0 to 1) of the predictability of asset price trajectories. Illiquidity is surprise.
Global macro was the strategy of choice for many of the big managers early in their careers. Big-name brands including Soros, Tudor and Moore saw the value of the strategy in the 1990s. This oft-misunderstood strategy is returning to the forefront. Diane Harrison looks at why.
Unless Reuters has been utterly misled, a recent report there suggests that Europe's greybeards are considering an astonishingly bad approach to the insolvency of their banking system: soak the pensioners.
That gadfly of financial modelers and quants is back. This time, Taleb writes in such a way as to establish that he isn't a mere popularize/diluter of familiar academic arguments -- which is how the critics of many of his earlier books have painted him. And them.
Maury Cartine, CPA, JD, Partner in Charge of Alternative Investment Group Tax, Marcum, LLP, looks at the tax changes and what this means for managers and investors.
The separation of alpha and beta is becoming a matter of routine, and the result will (PwC suggests) eliminate the division between "alternatives" investing on the one hand and "traditional" investing on the other.
The multi-state, multi-national law firm Pillsbury Winthrop Shaw Pittman has offered its clients, especially the banking entities among them, a guide to the principal elements of the newly finalized Volcker Rule, and it touches upon several significant concerns that industry participants have expressed.
Roving columnist at-large Douglas Friedenberg reports on the Investor Summit on Climate Risk, NYC.
Deloitte's pie graphs emphasize the degree to which both hedge funds and PE vehicles have become dependent upon institutions in general, and detached from the retail market. But Deloitte says that 2014 "will likely see additional efforts by alternative fund managers to engage the retail investor base by taking their alternative investment strategies mainstream."
Managed futures are performing quite poorly. They also have a higher standard deviation than the HF industry aggregate, so it seems that if you're invested there your losses are at least buying you greater risk. [Wait. That can't be right.]
The Skorina Report looks at the returns of the Ivy Leagues, which show allocation is not destiny.
A new white paper from Debtwire and Bingham McCutchen finds some reason to be bullish about the distressed debt market in 2014. The long-awaited tapering of the Federal Reserve's easy-money policy may set off a wave of defaults, creating opportunities for the wary.
Corporations have cash in the till; and it is sitting up, begging to be put to work. Thus, M&A deals are on the way.
Pimco is expanding its active ETF offerings significantly. By serendipity, The Cerulli Edge contains some fascinating data on the growth of the ETF industry. both active and passive.
A new report from GFIA highlights some asset manager successes: in the Japanese markets riding the wave of Abenomics; in India benefitting from the weakness of the rupee; and in the Arab world thriving against the backdrop of political turmoil.
Andrew Beer looks at hedge fund replication to see if it works.
Higher-education endowments are sticking with the “endowment model,” that is, their asset allocations remain stable. For example, in 2012, the surveyed institutions had 15% of their total AUM in domestic equities, 16% in international equities. In 2013, those figures were only slightly higher, 16% and 18% respectively.
The need for risk management in general and, more specifically, the inability of HNW Chinese otherwise to hedge against RMB exchange risk, is driving them to invest overseas.
A forthcoming paper by Goldstein et al opens a window onto the convergence of two market-structure issues that, until quite recently, had not even been thought very similar.
The latest in a series of annual reports from Rothstein Kass on women in the alternatives world adopts a somewhat less cheery tone than did that of last year. No longer is the dominant metaphor a "tipping point." Now it's a marathon.
Diane Harrison looks at what 2014 may hold for the markets. What pain in exchange for the gain may lie ahead?
In 2010 AlphaMetrix held a conference in Miami with Harry Markopolos as the keynote speaker. Markopolos' claim to fame is that he told the regulators about Madoff''s Ponzi Scheme, but his words fell on deaf ears. In 2013 AlphaMetrix, which claimed to the be the transparent antidote to Madoff stood accused by the CFTC of moving money in ways it ought not and in 2014, the principals of the firm are asking for a jury trial. It is indeed a tangled web and it is unlikely to be un-weaved any time soon.
The Supreme Court has received several amici briefs in the Halliburton case. They generally take the side of the defendant/petitioner, the corporation accused of securities fraud, in its opposition to the use of a 1980s vintage fraud-on-the-market theory to certify a class.
The crucial generalization to be drawn from the last three decades of alternatives investing by institutions is that generalization is tricky. Even within one type of structure, such as VCs, broad statements have to take account of the wide dispersion in returns, "making manager access and selection key determinants of success."
Burton Lifland's death leaves us recalling the late summer of 2007, when a decision of his re-shaped the dispute over two Bear Stearns affiliated hedge funds, while the liquidators over-relied upon the funds' mail drop in the Caymans.
Rene Levesque, guest author, looks at the differences between absolute return and alpha and answers the question: can you absolutely return alpha?
The U.S. Supreme Court has agreed to hear an appeal from a 2d Circuit decision in the long-running litigation between hedge fund NML Capital and the Republic of Argentina. Specifically, it is set to address whether a judgment against Argentina opens the door to discovery of Argentina's assets around the world, commercial and non-commercial alike.
Despite the uncertainties generated by contemporary politics, Cerulli is convinced that "investing in alternatives such as property and infrastructure funds should remain a major theme in the Thai mutual fund space in 2014."
Delaware's governor has nominated Leo Strine for the state supreme court. With that in mind, we review some of the highlights of Strine's career at the Court of Chancery especially as they concern clashes between corporate managers one the one hand and activist investors on the other.
Does your risk management policies cover the "blue screen of death?" Maybe they should. Guest author Stephanie Hammer looks at the growing risk associated with technology and it's not just for high-frequency traders.
Guest columnist Diane Harrison considers performance. What's the alternative?
In January 2013 the Council of the European Union agreed to allow 11 member states to institute a sweeping financial transaction tax as a matter of "enhanced cooperation." Now, a year later, the EU's tax commissioner, a one-time enthusiast of the idea, is signaling compromise.
Two academics had the nerve to question a thesis dear to the heart of David Kocieniewski of The New York Times. So he struck back.
Guest columnist Don Steinbrugge provides his thoughts on what the coming year will bring for hedge funds.
A recent paper on "Option Implied Volatility, Skewness, and Kurtosis and the Cross-Section of Expected Stock Returns" finds a positive relationship between each of the three listed characteristics of a distribution on the one hand and ex ante expected returns on the other. In the case of skewness in particular, this finding struck me as a bit odd.
A contractual provision for the mandatory repurchase of loans affected by a misrepresentation was supposed to be the alternative remedy, keeping disputes between the parties out of the courts. In the matter of ACE Securities, that didn't work.
In the interests of full disclosure I acknowledge here that I recently entered the realm of bitcoin owners myself. That said, bitcoin is a fascinating story, one of our top five of the past year.
The IMF has been embarrassed by recent events and hopes to prove that its approach to debt restructurings is not all about the 'occupation' of debtor nations. So it seems determined to make life more difficult for the bondholders of insolvent sovereigns.
Guest columnist Shane Brett looks at the year ahead.
Guest columnist Sourabh Jeswani explains regulatory changes in India's real estate market and the opportunities these changes may offer.
The numbers of undead mutual funds in China has created a sharp disparity between the fund count and the AUM count. Since no one ever drops out, the fund count only goes up.