Hedge Fund Industry Trends

Beware the Hedge Fund Indices of March, Caesar

Apr 14th, 2014 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Performance, Analytics & Metrics, Today's Post

Japan-focused funds had three consecutive months of negative returns this quarter. These numbers look particularly jarring in contrast to the 2013 returns, from back in the days when Abenomics was being hailed as a success.


What a Hedge Fund Failure Looks Like

Apr 13th, 2014 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Today's Post

By Jeff Malec, CAIA CEO, Founding Partner Attain Capital Management, LLC The Twittersphere couldn’t get enough of the news last week that hedge fund legend Paul Tudor Jones was shutting down one of his eponymous funds, the Tudor Tensor Fund (try saying Tudor Tensor 10 times fast). And critics of hedge funds will jump to the [...]


Investment Views on Emerging Markets Exposure Brighten

Mar 24th, 2014 | Filed under: Emerging markets, Hedge Fund Industry Trends, Hedge Fund Strategies, Performance, Analytics & Metrics, Today's Post

Have the emerging market assets and the funds focused thereon warranted this return of confidence by their recent returns? The answer to this question can't be any more emphatic than, "yes, somewhat."


The JOBS Act – has it made an impact?

Mar 12th, 2014 | Filed under: Hedge Fund Industry Trends, Today's Post

Few choose to act on the U.S. JOBS Act 'benefits.'


The Cheat Sheet from Years of Wizardly Advice

Mar 11th, 2014 | Filed under: Book review, Hedge Fund Industry Trends, Risk management, Today's Post

The story told here of Bruce Kovner and a botched soybeans trade conveys a lesson about the value of persistence, and a lesson about risk management.


Converting to the ’40 Act and a Checklist

Mar 4th, 2014 | Filed under: Alternative Mutual Funds, Hedge Fund Industry Trends, Investment Management Fees, Retail Investing, Today's Post

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?


Depositary-lite and the challenge of implementation

Mar 3rd, 2014 | Filed under: Hedge Fund Industry Trends, Hedge Fund Regulation, Regulatory, Today's Post

AIFMD brings many changes to the table. Grant Thornton Ireland has issued a new paper looking at the ramifications.


The Struggle Against Latency: Four Layers

Feb 27th, 2014 | Filed under: Algorithmic and high-frequency trading, Hedge Fund Industry Trends, Technology, Today's Post

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.


Is Global Macro en Vogue for 2014?

Feb 20th, 2014 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Today's Post

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.


Deloitte to Hedge Funds: Emulate the Agility of a Skier

Feb 10th, 2014 | Filed under: Alpha Strategies, Alternative Mutual Funds, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Performance, Analytics & Metrics, Risk management, Today's Post

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."


Two Troubled Strategies by the Numbers

Feb 9th, 2014 | Filed under: Alpha Strategies, Commodities, CTA, Hedge Fund Industry Trends, Hedge Fund Strategies, Today's Post

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.]


North American Distressed Debt: Review and Prospect

Feb 5th, 2014 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Today's Post

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.


Women Running a Marathon Toward Alternatives

Jan 26th, 2014 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Hedge Fund Industry Trends, Institutional Investing, Today's Post

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.


Are you looking for Alpha? Or Absolute Return?

Jan 16th, 2014 | Filed under: Alpha Hunters, Alpha Seekers, Hedge Fund Industry Trends, Performance, Analytics & Metrics, Today's Post

Rene Levesque, guest author, looks at the differences between absolute return and alpha and answers the question: can you absolutely return alpha?


It’s Always Relative…That Is, In Performance

Jan 9th, 2014 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Performance, Analytics & Metrics, Today's Post

Guest columnist Diane Harrison considers performance. What's the alternative?


10 Top Hedge Fund Industry Trends for 2014

Jan 6th, 2014 | Filed under: Alpha Seekers, Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, High-net-worth investors, Institutional Investing, Today's Post

Guest columnist Don Steinbrugge provides his thoughts on what the coming year will bring for hedge funds.


Getting Past the ‘Taper Tiger’

Dec 15th, 2013 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Today's Post

Guest columnist Diane Harrison on taming the taper tiger.


The Cayman Islands’ New Fund Governance System

Dec 12th, 2013 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Regulation, Today's Post

Ogier Partner Peter Cockhill recently examined the direction in which the Cayman Islands regulator CIMA is headed on fund governance. He thinks the costs of the new framework, though real, will prove reasonable given the benefits.


October Wasn’t Spooky for Hedge Fund Industry

Nov 24th, 2013 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Today's Post

October saw some outflow of money from hedge funds in North (and Latin) America, though there were net inflows in the other regions. Eurekahedge attributes the North American outflow to profit taking and portfolio shuffling, and expects that money will be back.


Fee reduction and alpha generation: Why fee reduction is the purest form of alpha

Nov 14th, 2013 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Investment Management Fees, Today's Post

Guest columnist Andrew Beer looks at fee reduction as an "alpha generator."


Much ado about nothing..in other words, the JOBS Act is finally here

Oct 13th, 2013 | Filed under: Hedge Fund Industry Trends, Institutional Investing, Regulatory, Retail Investing, Timely Research, Today's Post

Guest columnist Diane Harrison looks at the U.S. JOBS Act for what it is...and isn't.


The Risk-On, Risk-Off Teeter-Totter: How Managers Adapt

Sep 17th, 2013 | Filed under: Hedge Fund Industry Trends, Institutional Investing, Today's Post

Cerulli reminds us that risk-on/risk-off environments now alternate with dizzying speed. Even within the course of 2013 there has been a swing from cautious optimism to just-plain cautious.


Momentum in Asset Growth is Vital to Successfully Raising Hedge Fund Assets

Sep 11th, 2013 | Filed under: Hedge Fund Industry Trends, Today's Post

Guest columnist Don Steinbrugge looks at the asset-raising obstacles for small- to mid-sized hedge funds.


Time to Put Away the Trashy Novel

Aug 25th, 2013 | Filed under: Alpha Seekers, CTA, Hedge Fund Industry Trends, Hedge Fund Strategies, Today's Post

Print 'em out and head to the beach for one last hurrah of summer!


Cautious Commonfund White Paper Defends Hedge Fund Role

Aug 22nd, 2013 | Filed under: Hedge Fund Industry Trends, Institutional Investing, Today's Post

Commonfund doesn't seem to have its heart in the project of defending hedge funds specifically as winners of alpha. Rather, its new white paper offers other, non-alpha, defense of the hedge fund as an institution.


Building a Successful Fund Firm From the Start

Aug 21st, 2013 | Filed under: Best Practices, Commodities, CTA, Hedge Fund Industry Trends, Hedge Fund Operations and Risk Management, Performance, Analytics & Metrics

Grant Jaffarian, AlphaTerra LLC, discussed the importance of messaging


Moving Into the 40 Act Space: An Offer of Assistance

Aug 8th, 2013 | Filed under: Alpha Seekers, Alpha Strategies, Alternative Mutual Funds, Hedge Fund Industry Trends, Investment Management Fees, Retail Investing, Today's Post

Citi Prime's report has in mind specifically the situation of hedge fund firms that are interested in expanding into the public-offerings space. They have to keep in mind that they'll have a completely different investing audience from that of the QIPs and institutions to which they are accustomed.


AIFMD Europe-Wide Standardization: Not Yet Accomplished

Aug 5th, 2013 | Filed under: Hedge Fund Industry Trends, Regulatory, Today's Post

As Julian Young, Partner, EMEIA Asset Management, E&Y put it, some alternative investment fund managers will need to "operate across a patchwork quilt of regulatory standards [in Europe] for the next few years at least" despite the standardization goals that were part of the appeal behind AIFMD.


What Does a Charity Polo Game in Greenwich Have to Do with the JOBS Act?

Aug 4th, 2013 | Filed under: Hedge Fund Industry Trends, Today's Post

Guest columnist Barbara Tollis takes a tongue-in-cheek look at the JOBS Act.


PrevInvest on The Taper and the Summer Lull

Jul 30th, 2013 | Filed under: Alpha Strategies, Commodities, Currencies, Hedge Fund Industry Trends, Today's Post

The key to an equity hedge strategy in the U.S. at present is that “the basket of those stocks generating healthy profits becomes clearer to differentiate from those that are having trouble doing so” through the earnings season. PrevInvest is moderately bullish on this, but not bullish on an event-driven strategy.


A Shotgun Apartment for Wealth Managers

Jul 29th, 2013 | Filed under: Best Practices, Hedge Fund Industry Trends, Today's Post

Celent reports that for many wealth managers the nature of market conditions, and in particular the ever more strenuous compliance demands, have pressed them to make more effective use of the technology portion of their budget, from the front office to the back. We give some thought to the implicit imagery.


JOBS ACT Hedge Fund Marketing Strategy

Jul 9th, 2013 | Filed under: Hedge Fund Industry Trends, Today's Post

Don Steinbrugge, guest columnist, on what the US JOBS Act may mean for hedge fund marketing.


Tolstoy, Happy Families and Asian Managerial Success

Jul 8th, 2013 | Filed under: Alpha Seekers, Alpha Strategies, Emerging markets, Hedge Fund Industry Trends, Hedge Fund Strategies, Today's Post

Asset managers within the Asian boutique universe keep telling GFIA that "asset raising is hard" in the present climate. It isn't going to become easy any time soon, but there is a new level of stability.


A Third Wave of Alt-Industry Growth is Upon Us

Jun 30th, 2013 | Filed under: Alpha Strategies, Alternative Mutual Funds, Hedge Fund Industry Trends, Retail Investing, Today's Post

Private fund managers who want to be part of this wave, who hope to compete for the retail investment market with their absolute-return and non-correlation toolkit, shouldn’t think it is going to be easy. One of the sections of the SEI report is headed “understanding the hurdles.”


Barclays: Growth Strategies as an Industry Matures

Jun 27th, 2013 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Today's Post

On of the key points of the new report from Barclays, Making It Big, is that there are four broad business strategies that define hedge fund managers: product specialists (PS); asset class specialists (ACS); multi-strategy managers (MSM); and diversified alternative asset managers (DAAM). This classification has implications for growth.


A Year After the AOL Proxy Fight: The Simple Lesson

Jun 26th, 2013 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Today's Post

It was surely not irrational for Starboard Value, a year ago, to ask its fellow AOL shareholders to withhold or withdraw the sort of 'trust' that Armstrong has requested of them on the subject of the hyper-local news experiment Patch.


Rajaratnam Prosecution Sends a Signal: Traders Notice

Jun 25th, 2013 | Filed under: Hedge Fund Industry Trends, Legislation/Court rulings, Risk management, Today's Post

The arrest of Rajaratnam almost four years ago and the subsequent anti-insider enforcement activity doesn't of course come as news. But it raises fascinating questions about consequences: what have been the consequences amongst traders?


Rice Elucidates Views on Managed Futures, Retail Investors

Jun 24th, 2013 | Filed under: Commodities, CTA, Hedge Fund Industry Trends, Today's Post

To encourage further exchange and understanding, I went back to Mr. Rice, after reading a comment from our reader, and asked him to expand on managed funds and their noncorrelation with traditional (largely equity) investment strategies. Tags, Agriculture, Commodities, Derivatives


Marketing Closer or Poseur? How to Identify the First and Avoid the Second

Jun 13th, 2013 | Filed under: Alpha Seekers, Alpha Strategies, Best Practices, Hedge Fund Industry Trends, Today's Post

Guest columnist Diane Harrison takes a hard look at asset raising and the people who do it.


PrevInvest: No Wind in Sails of Long/Short Equity

Jun 9th, 2013 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Timely Research, Today's Post

PrevInvest begins a new report by documenting the doldrums in which long/short equity is stuck. As a first approximation because in the post-crisis world, certain traditional forms of stock-picker virtue have gone unrewarded.


The Wind and the Leaves: Causality in Commodity Prices

Jun 5th, 2013 | Filed under: Asset pricing, Commodities, CTA, Derivatives, Hedge Fund Industry Trends, Today's Post

Three scholars find a very real possibility that there is a cause and effect relationship between index flows in the derivatives markets, at least the agricultural index markets, on the one hand and price moves in the underlying commodity on the other.


Preqin on Global Alternative Assets and Learning Curves

Jun 4th, 2013 | Filed under: Hedge Fund Industry Trends, Private Equity, Today's Post

The pattern with respect to allocations by institutional investors to hedge funds since 2009 is somewhat different from that of allocations to private equity. As Preqin’s report explains, many institutions have long been familiar with hedge funds, their learning curve has flattened out so to speak, and they have established a target allocation for hedge funds considered as an asset class.


Merger Arb: Dampers and Bright Spots

May 9th, 2013 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Today's Post

Twelve ministries in the People's Republic of China, including the Ministry of Industry and Information Technology, have together released guidelines for accelerating M&A activity in key industries. this is one of the "bright spots" that may lighten up the future for the M&A world, though macro-economic realities in the U.S. and Europe are holding it back.


Agecroft Partners Believes Hedge Fund Branding Drives a Majority Of Asset Flows

May 2nd, 2013 | Filed under: Hedge Fund Industry Trends, Today's Post

By Don Steinbrugge


Hedge Fund Replication: A Re-examination of Two Key Studies

May 1st, 2013 | Filed under: Alternative Beta & Hedge Fund Replication, Hedge Fund Industry Trends, Today's Post

Guest columnist Andrew Beer re-visits two significant studies on hedge fund replication.


Hedge Funds as Metaphor: And Not in a Good Way

Apr 22nd, 2013 | Filed under: Book review, Hedge Fund Industry Trends, Media Coverage of Hedge Funds, Today's Post

One take-away from David Stockman's new best selling book is that the phrase "hedge fund" may well be on its way beyond descriptive significance. In the public realm, a "hedge fund" is now as much a metaphor as is a "Trojan horse." It is becoming a metaphor for any institution's failure to hedge.


How Hedge Funds Need to Adapt Part II

Apr 21st, 2013 | Filed under: Hedge Fund Industry Trends, Hedge Fund Operations and Risk Management, Hedge Fund Strategies, Institutional Investing, Performance, Analytics & Metrics, Today's Post

Part II of a new SEI report on hedge funds and adapting to survival.


Japan as Hedge Fund Opportunity

Apr 15th, 2013 | Filed under: Hedge Fund Industry Trends, Today's Post

All three classes of hedge fund outperformed the relevant index, Topix 1000, in the period since January 2004. Also, both broad based indexes and two of the HF indexes show a sharp uptick on the right hand edge of the graph, reflecting the ascension of Prime Minister Abe and the aggressive policies of the Bank of Japan.


How Hedge Funds Need to Adapt: Part I

Apr 7th, 2013 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Performance, Analytics & Metrics, Today's Post

“Few managers would be surprised,” SEI says, “that nearly one-third of the institutions queried in SEI’s 2012 survey reported making their due diligence processes more robust over the last two years.” The new robustness in the search for the nature and sustainability of the funds’ edge involves a new granularity, the questioning of specific investment decisions in the context of portfolio construction models.


Is This the End of the Gilded Age for Hedge Funds?

Apr 3rd, 2013 | Filed under: Hedge Fund Industry Trends, Today's Post

"America’s top 25 hedge fund managers make more than all the CEOs of the S&P 500 combined.”????--The Economist, October 2012 Hedge Funds have had an incredible run over the last 2 decades. The annual salaries and bonuses of the most successful managers have been amongst the highest paid to anyone, anywhere, ever. Astronomical wealth has kept everything from top end international property to luxury goods to private yachts afloat for many years. ?This is starting to change. Multiple headwinds of lackluster performance, increasing competition and invasive regulation are starting to bite.