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.
Guest columnist Diane Harrison examines the relationship between family offices and emerging managers and why some managers get money and why others don't.
Meredith Jones' book on investing in women takes it to the Street and comes back with some solid conclusions.
Florida's State Board of Administration deserves some credit for undertaking a recent corporate governance study. Even trying to look at the consequences of its proxy-contest votes over a period of up to five years after they are cast seems to have shattered a glass ceiling separating actual institutional behavior from common sense.
Charles Skorina looks at the new crew at NYU.
An idea for the hierarchical design of a platform's APIs, and a particular expression of that idea, walk into a bar. What's the punch line?
Guest columnist Andrew Smith, CAIA, examines the risks and rewards of investing directly in farmland.
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.
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.
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.
Charles Skorina looks at the top public endowments and discusses performance with Erik Lundberg.
The hapless U.S. mutual funds Chen and Gallagher sample have a nominally positive pre fee alpha only when measured against CAPM. That disappears into the negatives when the baseline used is the Fama-French model, and deeper into the negatives when the momentum factor is added.
Investors in hedge funds want more transparency than they think they're getting, a fact that might not be clear to their managers.
Eurekahedge's latest report gives a number of timelines for grappling with changes in the hedge fund world: since 2007; since January 2013; YTD January 2015. In any frame, you don't have to be a meteorologist....
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.
A newly released report tells us that ESMA is unhappy with the national "competent authorities" as to how they've enforced MiFiD. the report implies that the adjective in the phrase "competent authorities" is to be understood as a courtesy rather than a description.
Brad Case, Ph.D., CFA, CAIA, looks at the relationships between public and private real estate.
Guest columnist Diane Harrison finds five trends in hedge funds that are worth watching.
Guest columnist Charles Skorina takes a look at investment divestment..
...One of the key hurdles all managers face is the investor interview, when the focus is not on the fund or strategy, but on the manager’s ability to sell him or herself. While managers are typically comfortable discussing their investment thesis and related activities, they are markedly less able to articulate the personal and intangible details about which investors want to learn more.
To the extent that high-frequency trading is analogized to 'insider trading,' it may be in trouble with securities regulators but still in the clear with commodities regulators. After all, the latter do allow hedgers to use non-public material information to protect themselves. But Gregory Scopino doesn't believe pinging and related HFT practices should be in the clear with the CFTC at all.
As the CEO of AIMA, Jack Inglis, said: Many pension-fund trustees "are asking questions about their existing or prospective hedge fund allocations. Rarely has there been such demand for a realistic assessment of the benefits – and also the risks – associated with hedge fund investing.” The AIMA and CAIA are working together to meet that demand in a series of papers.
Guest columnist Don Steinbrugge, CFA, surveys institutional investors and hedge funds to find out what the top trends may be for 2015.
The new survey from Natixis tells us that a lot of asset-managing institutions think their industry as a whole has been quite slow about moving in the direction of liability-driven investment strategies. Also, more than half believe traditional assets are too correlated to provide them with the diversification they need.
The royal family in Qatar, the House of Thani, just took direct control of the emirate's sovereign wealth fund. Also, that fund just invested big in Uber, confirming its reputation as perhaps the worlds most aggressive deal-hunting institution.
The most intriguing revelation in the exchange of briefs between the State of New York and Barclays appears in a humble footnote, where Barclays seems to concede that an employee was pressured to change an internalization number. But it was just the once....
Guest columnist Peter Urbani looks at emerging managers and why they may be re-emerging and bringing alpha with them.
Should investors, especially institutional investors, push back (or push back harder than they have so far) against the fee structure preferred by those whom they pay to manage their money? And is the recent announcement from CalPERS such a push?
Guest columnist Andrew Beer looks at the changes in institutional investing.
Guest columnist Don Steinbrugge, CFA, looks at some of the potential reactions to CalPERS' leaving hedge funds.
Guest columnist Charles Skorina looks at the five-headed NYC pension system with its new leader, Scott Evans.
Guest columnist Diane Harrison looks at what advisors think of hedge funds.
For an investor allocating slots in its portfolio to hedge funds, the draw of recent outsized performance can be powerful. Thus, the temptation to chase winners. But two members of the Hedge Fund Strategies Group at Commonfund caution against it.
Private foundations have "regained solid financial footing" in terms of their investment returns over the last two years especially, after the shaky years that preceded. Their mission-related spending has accordingly increased.
The Skorina Report is Surfing the Age of Asset Management: Will the tide of global AUM lift all asset-management boats?Jul 31st, 2014 | Filed under: Guest Posts, Institutional Investing, The Skorina Report, Today's Post
Charles Skorina looks at the future of CIOs and with rising AUM and sees a forecast calling for sunny and bright. Maybe it's finally time to break out the shades!
If such institutions as the ECB keep rewarding indebtedness, then over time they get their way. They'll get a lot of deal making, even if it amounts to a frenzy. Then investors will demand funds that play to that frenzy.
In Asia the high-net-worth population still consists largely of the first-generation wealthy. So: what are these Asian entrepreneurs looking for in their private banking services? That is one of the questions McKinsey considers.
Had the plan not received final IRS approval, the benefits part of the Times/Guild contract would have reverted to a DC plan, and this would have been yet another exhibition of how defined contributions is sweeping all before it. But the IRS did approve, and that broom is for now back in its closet.
Guest columnist Donna Howe examines diversity at the board level. Does it make a governance difference?
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.
Guest columnist Don Steinbrugge looks at why allocators continue to invest in hedge funds, even when the media thinks they shouldn't.
Jeff Malec, CAIA, looks at why large hedge funds have all the fun and get all the money.
Europe's pension fund managers embrace LDI quite generally, and many embrace the "dynamic" version of that strategy. But four scholars at EDHEC find it curious they don't do so for the right reason -- they don't seem to see LDI as the risk-management imperative it is.
Guest columnists Andrew Beer and Michael Weinberg look at the opportunities that lie in the largely untapped alternative mutual fund markets.
Doug Friedenberg talks about investing in the climate and what real investors can and are doing with it.
Longevity hedging transactions are growing at an exponential rate in the UK. We focus on one case study in such transactions that might encourage (cautious) optimism about the tractability of demographics.
Sophisticated institutional investors contracting with outside active managers can get positive alpha out of the U.S. equities markets, despite the arithmetical and a priori reasons for skepticism.