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All About Alpha

All About Alpha
AllAboutAlpha.com is an online strategic information service for the asset management and hedge fund industries. With nearly 1,000 archived articles and entries, and new material added daily, AllAboutAlpha.com is a research tool designed to be an "early warning" system for asset managers, service providers, and investors. Like a research firm, they immerse themselves in the latest academic research, scan the headlines and provide subscribers with what they need to know as the asset management industry enters a period of rapid evolution. Like a "blog," they deliver those insights in a manner that is easy to digest, frequent and tempered by their own unique view of the world.

Recent blog posts

  • Rowady’s Thoughts on Volatility, Data and Crowd
    If you want to value the derivatives in your portfolio accurately, then you’d love to predict the forthcoming volatility. Right? Since you can’t, you’ll make do with either implied or historical volatility. Still, what you’d really like, the “holy grail” of the knights of valuation, is to know what volatility will be during the life of the instrument.
  • AIFMD Europe-Wide Standardization not Yet Accomplished
    A recent study found that only 12 of the 27 member states of the European Union have thus far completed full legislative transposition of the Alternative Investment Fund Managers Directive. Further, five member states “have made little or no progress” toward such a transposition.
  • Asia’s Stories: Equities, Wages, Exports
    The average wage rate in China and to a lesser extent in Thailand has been surging, especially in period since 2007. In other countries in the region it has remained more-or-less constant.
  • Russia is Back to Stay in the Middle East
    Russia is back. President Vladimir Putin wants the world to acknowledge that Russia remains a global power. He is making his stand in Syria.
  • Africa: Equities and Beyond
    GFIA Research Insights showcase shows how far the category “emerging markets” goes beyond the BRICs giving a sense of the range of strategies and instruments involved in alternative investments with the continent of Africa today.
  • A Thought for the Next Relapse: Europe and Gold
    An analytical piece by Stephen Fidler raised the prospect of the use of gold as collateral for sovereign debts, something that sounds like a big step toward re-monetization. One story does not make for a policy shift, but it is good that such ideas have returned to the mainstream of discussion after a long and unhealthy exile.
  • The Politics of Alpha: Europe, China, and the U.S.
    On the morning before the first U.S. Presidential debate of the general-election phase of this campaign season, Janus Capital hosted a roundtable on “Investing and Politics,” discussing what the outcome of the election, and other political shifts here and abroad, may mean for your portfolio.
  • Healthcare Nonprofit Investments: The Case for Boredom
    The research arm of the Commonfund Institute has released the results of a survey of nonprofit health care organizations, showing that their average investment returns in FY2011 were: zero. It would have been worse than this flatline, but for the attachment of these organizations to the allocation of a large portion of their portfolios to boring old fixed-income assets.
  • The Rise and Rise of Operational Due Diligence
    Shane Brett takes a look at operational due diligence and recommends letting the sun shine in.
  • Banks Aren’t Really Much Like Dominoes
    Whether the growth of the credit derivatives market caused or contributed to the U.S. centered financial crisis of 2007-08 is an issue that is already passing into the domains of academic economists and economic historians. But the unquestioning public assumption that the answer is “yes” could yet do some real ongoing harm.
  • The Climate Change Trade: Your Portfolio May Never Look the Same
    A lot of problems get solved when you understand natural tendencies. Everyone has had the experience of a single buzzing fly in the house on a summer night We used to run around with a newspaper while the fly laughed, until we remembered that flies gravitate towards light. So when a rogue fly appeared in the evening, we would turn off all the lights and open the door to a small lighted room. The fly would fly into the room, we would close the door, and summary execution soon followed. It’s easier to get flies or people to move in the directions they’re predisposed to move.
  • Future of Asia’s Synthetic ETF Market May Lie With Singapore Regulators
    Celent expects that there will continue to be a global trend of increasing volume for physical ETFs in the Asian markets, but it does not necessarily expect a booming future there for synthetic ETFs. In a recent white paper, “Synthetic ETFs in Asia-Pacific: A Losing Battle?” Senior Analyst Anshuman Jaswal makes the case that the Asian market “might struggle to grow at the same pace in the future.” It appears that much will depend on the unfolding consequences of recent action by Hong Kong’s regulators, and by ongoing deliberations in Singapore.
  • What Good is Money? What Good is ‘Europe?’
    The latest European summit culminated in a seven-page statement by the euro area heads of state or government. Separately, Herman Van Rompuy, President of the European Council, has got letter co-signed by Germany’s Chancellor, Angela Merkel, and France’s President, Nicolas Sarkozy. The two statements have some people thinking of politics, some thinking of diplomacy, and yet others thinking about the nature of money and the lure of gold.
  • Can Emerging Market Nations save the world, or just investors?
    For the past few months, reporters, commenters, bloggers and twitterers have been frequently using the aggressive terminology of war to discuss economic matters. One of the most common has been the claim that central bankers of the developed world, and/or their Treasuries, have "run our of bullets", stemming from the belief that all their ammunition has already been used in seeking stimulus, leaving nothing should there be another serious dip.
  • I didn’t do it! The hedge funds did!
    Hedge funds have been blamed for a lot of things – the recent financial crisis, illicit financial market activity, bad weather, natural disasters, the Middle East conflict… What they haven’t been blamed for are high and rising oil prices, and in turn high and rising gas prices, which anyone in North America who drives something with an engine can certainly attest to.
  • From poison pens to poison pills: New, improved, and definitely more bitter for activist hedge funds
    For those who haven’t had the pleasure of reading a well-written, vitriol-filled diatribe from an activist fund manager bitterly complaining about foot-dragging and other tactics to convince shareholders, you’re definitely missing out.
  • Think you know all about infrastructure investments? Think again
    Infrastructure has long been one of the more esoteric “alternative” investments, broadly defined as a separate asset class yet loosely grouped with both other kinds of non-market-correlated investments and one another. Indeed, save for a few large and sophisticated pension plans, few have been able to differentiate among the numerous and varying kinds of infrastructure opportunities out there, instead lumping them all into one category (much in the same way many institutions lump hedge funds in “absolute returns”).
  • Elephantine sovereign wealth funds trying to fly “below the radar”
    It seems that sovereign wealth funds are the latest “scary” thing in the media – perhaps scarier than high-frequency traders, Irish banks, Greek tax collectors or U.S. subprime borrowers. But there’s a difference: where the latter may blow up an economy, SWFs merely threaten to take it over, or at least its commanding heights (whatever those are these days).
  • OK, people: stretch those muscles, and let’s invest in a way that has a positive impact!
    A car accident, a plane crash, or Jane Fonda’s workout, perhaps, but ‘impact’ is not a word one might typically associate with investing. Especially in the context of alternatives, using ‘impact’ could be construed either meaning augmenting returns in a broader portfolio or potentially hitting the deck as the market is crashing.
  • Insider Traders: Rogues or Whistleblowers?
    Insider trading has been around for eons. Its recent emergence in the slightly more institutionalized form of an “expert network” says more about the perennial tension between investors’ quest for information versus the public’s desire for a level playing field than it does about the need for an overhaul of the hedge fund industry.
  • Using options instead of stocks for merger arb: Apparently not for the faint of heart
    With corporate balance sheets flush with cash, there has been a lot of talk recently about the potential for an M&A bonanza. This, of course, would provide opportunities for merger arbitrage hedge fund managers. Whether you consider their returns to be a fair compensation for long the successful completion of deals or the result of pure skill, research has shown that merger arb has produced positive returns over time.
  • Co-investing alongside hedge funds? Could be lucrative, but read this first…
    Hedge funds continue to bear the brunt of blame for the 2008 credit seizure, market collapse and ensuing Great Recession. Whether part of the problem (securitization), an exacerbation of the problem (short-selling) or the problem itself (Madoff), the weight of public opinion continues to be stacked against them.
  • Guest blog: Private Equity As Victim: Leverage takes back seat to value creation
    There is no clear-eyed view on the culprits behind the Great Liquidity Meltdown of 2008-2009. But there is a gimlet-eyed view: everybody. That’s a fancy euphemism for “systemic.” And so the regulatory Leviathan grinds forward, with tighter strictures for the banks that are already regulated, and now to draw the so-called shadow banking system into its grips.
  • Guest blog: Study reveals Achilles heel of mega private equity funds
    It looks like small pension funds are the only Davids than can run circles around their larger Goliath competitors. A recent study of private equity funds found that large funds earn lower returns.

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