Hedge Fund Industry Trends

What Taper Tantrum?  And, Will Yellen Pull a Bernanke?

Aug 30th, 2015 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Indexes, Macroeconomics, Today's Post

The head of the New York Fed said on Wednesday, August 26th, that "the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago." We may be about to see another Fed retreat, analogous to that of a little more than two years ago.


CFTC Exempts ASX Clear from DCO Registration

Aug 25th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Commodities, Hedge Fund Industry Trends, Today's Post

The CFTC has issued its first exemption from the CDO registration mandate under 5b (h). The successful petition for that exemption, from ASX Clear, has the additional merit of having inspired an idiosyncratic seeming, but concise, comment letter, quoted in full here.


Weintraub of GFT: Basel III Coming Into Force by Increments

Aug 20th, 2015 | Filed under: Asset allocation, Hedge Fund Industry Trends, Regulatory, Risk management, Today's Post

Faille spoke recently to Herman Weintraub, executive director and head of alternative investment practices at GFT, about the impact of the Basel III rule changes upon the HF industry. Weintraub says, one ought to look not at the parts, but at the whole.


Hedge Fund Assets to Increase a Quarter Trillion Dollars by Summer of 2016

Aug 19th, 2015 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Media Coverage of Hedge Funds, Today's Post

Guest columnist Don Steinbrugge on why hedge fund AUM is set for an increase over the course of the next 12 months.


Event-Driven Hedge Funds Rescued by Obamacare

Aug 11th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Today's Post

Obamacare's impact on the investment world may have been mitigated until very recently by the protracted and complicated litigation that the law immediately generated starting with its enactment in 2010. But now....


MMIF Reporting: An Ongoing Challenge for Fund Administrators

Aug 5th, 2015 | Filed under: Corporate governance, Fund administration, Hedge Fund Industry Trends, Hedge Fund Regulation, Today's Post, UCITS

Guest columnist Shane Brett discusses a new RR Donnelley survey on the MMIF challenges facing fund administrators.


The Strength of Multi-Strat Is No Mystery

Aug 2nd, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Investment Management Fees, Today's Post

Credit Suisse Capital Services says that appetite has increased of late, among institutional investors, for multistrategy funds. Faille offers some thoughts as to why.


Crisis? Tempted to Flee to Shelter of Big Funds? Bad Idea

Jul 29th, 2015 | Filed under: Academic Research, Alpha Hunters, Alpha Strategies, Behavioral finance, CAPM / Alpha Theory, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Today's Post

The authors of a new study of the relationship between fund size and performance employ a database consisting of 7,261 funds and their performance over a twenty year period (1994 to 2014). Spoiler alert: size is bad. Especially in a crisis.


Alternative Investments By the Numbers: Top 5 2015 YTD Takeaways

Jul 23rd, 2015 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Liquid Alts, Performance, Analytics & Metrics, Private Equity, Today's Post

Guest columnist Andre Boreas takes a look at the alternative investment universe year-to-date 2015 by the numbers.


PwC Looks Ahead to 2020: Offers a Roadmap for Alternative Investment Managers

Jul 5th, 2015 | Filed under: Best Practices, Emerging markets, Hedge Fund Industry Trends, Hedge Fund Strategies, Infrastructure, Technology, Today's Post

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.


The Core Satellite Model: How to Cut Hedge Fund Fees in Half Part II

Jun 25th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Hedge Fund Fees, Hedge Fund Industry Trends, Performance, Analytics & Metrics, Today's Post

Andrew Beer continues his discussion on slashing hedge fund fees without burning yourself or your clients.


Hybrid Equity: Another Perspective on Private Equity

Jun 14th, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Hedge Fund Industry Trends, Liquid Alts, Private Equity, Retail Investing, Today's Post

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.


Are CTAs mumbo jumbo or additive for a diversified hedge fund portfolio?

Jun 9th, 2015 | Filed under: Commodities, Hedge Fund Industry Trends, Hedge Fund Strategies, Today's Post

Guest columnist Don Steinbrugge looks at the value of trend-following CTAs in a portfolio.


How to Cut Hedge Fund Fees in Half-Part One

May 31st, 2015 | Filed under: Hedge Fund Fees, Hedge Fund Industry Trends, Institutional Investing, Performance, Analytics & Metrics, Today's Post

Guest columnist Andrew Beer takes on hedge fund fees. In part one of the series he looks at the investor aggregation model.


Top Hedge Fund Managers: They Aren’t Wizards, but They Are Masters

May 28th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Book review, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Real Estate, Today's Post

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.


Eurekahedge on Funds of Hedge Funds: A Downward Spiral

May 27th, 2015 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Investment Management Fees, Today's Post

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.


Does the hedge fund industry benefit society?

Mar 30th, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Media Coverage of Hedge Funds, Today's Post

Guest columnist Donald Steinbrugge, CFA, looks at the bad rap hedge funds have gotten and talks about why it's not deserved.


Most Investors Sanguine About Central Clearing Mandates

Mar 22nd, 2015 | Filed under: Best Practices, Derivatives, Hedge Fund Industry Trends, Regulatory, Today's Post

The international push to mandate central clearing has expanded the clearinghouses "well beyond levels the market has ever seen," Greenwich Associates reminds us in a new report. This is an experiment, and there remains some grounds for uncertainty about the outcome.


KPMG, MFA & AIMA: Institutional Investors & Customization

Mar 19th, 2015 | Filed under: Alternative Mutual Funds, Asset allocation, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Investment Management Fees, Liability Driven Investing, Regulatory, Today's Post

Surveys suggest that certain conspicuous ongoing trends will continue. For example, the classic 20 + 2 fee structure will continue to crumble, replaced by "customized" structures. A full 91% of the small hedge fund managers who filled out a survey agreed with this. A mere 76% of large hedge fund managers did likewise.


Women in Senior Roles in Alternative Finance: The Marathon Continues

Mar 16th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Hedge Fund Industry Trends, Today's Post

Funds of funds are quite different entities from single-manager funds from the point of view of the number of women in senior C-suite roles. Different in what direction? That depends upon the country under consideration.


5 Insights on a Hedge Fund Outlook

Mar 12th, 2015 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Today's Post

Guest columnist Diane Harrison finds five trends in hedge funds that are worth watching.


Why Constraints on Hedge Funds Matter

Mar 8th, 2015 | Filed under: Alpha Strategies, Alternative Mutual Funds, Hedge Fund Industry Trends, Hedge Fund Strategies, Indexes, Performance, Analytics & Metrics, Today's Post

Andrew Beer looks at what happens when talented hedge fund managers try and perform within the constraints of the mutual fund structure.


Low Energy Prices: Crude and Refined Consequences

Jan 21st, 2015 | Filed under: Currencies, Hedge Fund Industry Trends, Hedge Fund Strategies, Indexes, Today's Post

Eurekahedge tells us that hedge funds were in the black 4.57% in 2014. That's hardly cause for celebration, since the MSCI World Index returned 6.79% over the same year. But all eyes now turn to the still-sliding price of oil.


Top 10 Hedge Fund Trends for 2015

Jan 8th, 2015 | Filed under: Alpha Hunters, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Today's Post

Guest columnist Don Steinbrugge, CFA, surveys institutional investors and hedge funds to find out what the top trends may be for 2015.


Aligning Interests: Side Pockets, Side Letters, and Central Issues

Dec 9th, 2014 | Filed under: Asset pricing, Best Practices, Hedge Fund Industry Trends, Investment Management Fees, Today's Post

A proposed new set of principles, designed to encourage investors in the alt-investment industry in their discussions with their managements, encourages skepticism both about side-pocketed assets and about other investors' sweetheart deals (i.e. "side letters.")


What Happens to Hedge Funds if 2008 Market Conditions Repeat?

Dec 4th, 2014 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Performance, Analytics & Metrics, Today's Post

Guest columnist Don Steinbrugge examines what might happen to hedge funds if there's a 2008 "Groundhog Day" in the markets.


Big Data and Other Trends to Influence Hedge Funds in 2015

Nov 17th, 2014 | Filed under: Conference report, Hedge Fund Industry Trends, Technology, Today's Post

Big Data makes possible new ranges of inferences, and gives value to new skill sets. There will continue to be plenty of roles for human beings in recognizing the shadows cast by the intense light emitted by new technologies.


Looking at the Next Generation of Institutional Investing

Sep 25th, 2014 | Filed under: Asset allocation, Hedge Fund Industry Trends, Institutional Investing, Today's Post

Guest columnist Andrew Beer looks at the changes in institutional investing.


Top 5 Ramifications of CalPERS’ Hedge Fund Exodus

Sep 24th, 2014 | Filed under: Alpha Hunters, Hedge Fund Industry Trends, Institutional Investing, Today's Post

Guest columnist Don Steinbrugge, CFA, looks at some of the potential reactions to CalPERS' leaving hedge funds.


Investing in the Investor

Sep 4th, 2014 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Institutional Investing, Retail Investing, Today's Post

Guest columnist Diane Harrison looks at what advisors think of hedge funds.


Hedge Fund Branding Continues to Drive a Majority Of Asset Flows

Aug 14th, 2014 | Filed under: Hedge Fund Industry Trends, Today's Post

Guest columnist Don Steinbrugge looks at why the same hedge fund firms consistently bring in the assets.


Japanese Investors Sticking with Hedge Funds, Expect Nikkei Rise

Jun 29th, 2014 | Filed under: Currencies, Hedge Fund Industry Trends, Performance, Analytics & Metrics, Today's Post

Why it is possible that the recent uptick in animal spirits in Japan comes largely from a sense that Abenomics as originally conceived has run its course, and that Abe and the rest of the gang there will have to move on shortly.


Industry Discovery: Maturity is a Pain

Jun 26th, 2014 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Seeding/early-stage, Today's Post

One takeaway, from the point of view of the managers, is that a close engagement with institutional investors requires a lot of time and effort, and those commodities have to be budgeted. How to handle the circumstances of industry maturity is an individualized call.


A Far-sighted View: Fund Alignment Rights Are Wave of the Future

Jun 12th, 2014 | Filed under: Hedge Fund Industry Trends, Hedge Fund Regulation, Hedge Fund Strategies, Investment Management Fees, Today's Post

Guest columnist Rick Ehrhart looks at hedge fund incentive compensation.


GFIA Credits Japan Funds with Excellent Risk Management

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

Some Japan-focused long/short equity funds did produce positive returns in April, swimming against the stream in a month when Topix, Nikkei, and TSE Mothers all fell.


The Hedge Fund Fee Conundrum

Jun 1st, 2014 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Investment Management Fees, Today's Post

Andrew Beer, guest columnist, takes another look at the never-ending debate about hedge fund fees. Do they or don't they justify themselves?


Why Do Investors Love Large Hedge Funds?

May 8th, 2014 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Performance, Analytics & Metrics, Today's Post

Jeff Malec, CAIA, looks at why large hedge funds have all the fun and get all the money.


Performance Drag in Alternative Multi-manager Mutual Funds

May 5th, 2014 | Filed under: Alternative Mutual Funds, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Performance, Analytics & Metrics, Retail Investing, Timely Research, Today's Post

Guest columnists Andrew Beer and Michael Weinberg look at the opportunities that lie in the largely untapped alternative mutual fund markets.


Back and Middle Burners: Techstag Coming to an End

May 4th, 2014 | Filed under: Hedge Fund Industry Trends, Risk management, Technology, Timely Research, Today's Post

As the TABB Group and SEI remind us in a new report, "Reinventing Buy-side Infrastructure," the legacy systems widely in use on the Buy side are inadequate to post-legacy challenges, both for traditional and for alternatives managers. There's got to be a better way.


Keep Hope Alive: Look at Standard Deviations

Apr 28th, 2014 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Performance, Analytics & Metrics, Today's Post

We'll suppose you're an investor with a dream. You want to get in on the ground floor of something that will be really big. You can't be risk averse then, can you?


Estimates Show 90% of Hedge Funds ‘Socialize’

Apr 21st, 2014 | Filed under: Hedge Fund Industry Trends, Today's Post

Guest columnist Don Steinbrugge looks at how hedge funds can and do use social media


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.