A series of recent reports on the convergence in the asset management industry shows can alpha-seeking hedge funds and beta-seeking ETFs can make strange bedfellows - especially when they have a common enemy.
Portable Alpha & Alpha/Beta Separation
Portable Alpha has always been a convenient scapegoat for those who lost money in the stormy days of 2008. But now that the rain has gone, signs of balance and perspective are beginning to emerge.
It's not that active managers are using the wrong parts, it's just that they're using the wrong numbers of them, says this must-read document.
Disenchanted with the beta portion of their portable alpha programs, several major public pension plans are now shunning the approach. But that doesn't mean they're turning their backs on absolute return strategies. Far from it...
Usually hedge fund fund managers bristle at the suggestion that they "sell beta at alpha prices." If this is true, then fees will have to fall. But as a recent paper argues, volumes would also have to rise.
Whether they use portable alpha strategies or not, institutional investors are apparently demanding transparency about how much alpha and beta is contained in their existing funds.
Stressed about having your money locked up in a hedge fund? Just pop a few of these...
Portable alpha may have died last year. But according to at least one expert, it's about to be reborn.
After the announcement by Pennsylvania's state employees pension plan that it lost money on its portable alpha strategy, some are saying this is proof that portable alpha is "exotic and risky" and that its promoters are "thieves". We examine the validity of these claims.
A research paper by Edhec details a technique that might have helped some funds of funds navigate through this year's September from hell.
Not since Martin Luther tried to nail a redemption notice on the door of his Cayman-domiciled convert arb manager has there been such a spiritual revolution in investing.
It's a situation reminiscent of trying to dump your girlfriend or boyfriend before she/he can get a chance to dump you.
The pension community has been closely watching one of Sweden's national pension funds for clues about how a major re-org is going.
A meeting this week in London features the movers and shakers from the intersection of hedge funds and institutional investing.
It turns out the forces shaping the asset management industry aren't that different from those facing the global economy.
One of portable alpha’s originators says concept has evolved, in some cases, into something “vastly different”May 11th, 2008 | Filed under: Hedge Fund Regulation, Portable Alpha & Alpha/Beta Separation
PIMCO's Chris Dialynas was one of the pioneers of portable alpha. But his Epilogue to a new book on the topic reflects his concern with the direction it has taken.
A new mutual fund offering borrows from portable alpha concepts. Will retail investors finally bite?
A new book finally tries to bring it all together.
The Pennsylvania state employees are a little better off this year thanks to some bold investment moves.
A new survey of investment consultants reveals a significant split between the views of large and small players.
Notwithstanding new evidence of its alleged fruitlessness, support for active management seems to be coming from an unlikely source: passive managers.
A recent Bloomberg column suggests ETFs are a horror movie for both mutual funds and hedge funds. While mutual funds ought to be covering their eyes, hedge funds shouldn't be so scared.
In a December 2007 discussion paper, Franklin Templeton’s Australian fixed income group said it is seeing, “especially strong interest in the application of portable alpha to fixed income investing.” (Prudential’s fixed income group and Morgan Stanley’s Portable Alpha team would likely agree.) The paper is solidly alpha-centric: “Portable alpha strategies, designed to isolate generation of alpha (excess return [...]
Three job postings reveal that 130/30 is as much about sales and education as it is about investing.
When arguments can be made that 130/30 investing and portable alpha are cousins, why then has 130/30 become the cat's meow and portable alpha growth is "muted"? Two academics have a theory.
An official with one of Sweden's national pension funds told an audience last week that alpha-beta separation has led to more "creativity" on his team. His approach is clean and simple...like another Swedish innovation.
The term "exotic beta" still generates embarrased giggles when uttered outside the hedge fund industry. But one mutual fund company is trying to change that by applying hedge fund concepts to mutual fund analysis.
What if alpha didn't exist? Would that put a major kibosh on "portable alpha"? Apparently not. In fact, alpha may not even be that important to portable alpha after all.
For the 8th week in a row, Alpha Male finds himself eating conference Danishes and pre-package cream cheese for breakfast at "Portable Alpha & 130/30 USA".
A new white paper from T. Rowe Price ties together portable alpha and alternative beta.
In this guest posting, the CIO of one of five "buffer funds" in the Swedish pension system reflects on his experiences as a pioneer of alpha-centric investing.
Deutsche Bank recently announced the launch of a "portable alpha" product for retail investors - the latest in a steady flow of alpha-centric products hitting shelves during the recent market calamity.
A conference covering portable alpha, 130/30, LDI and related strategies has recently released its proceedings to the public. While they contain no new research, they show what's currently on the alpha-centric radar screen.
While nearly all institutional investors are now clear about the benefits of portable alpha, many are still put off by its often complex mechanics. Unlike a simple active long-only mandate, a portable alpha strategy can often involve multiple accounts, the assumption of counterparty risk when using swaps for beta exposure, and cash management and rebalancing due to [...]