Calling Readers! Fight for Corruption-Busting SC Treasurer Curt Loftis As GOP Tries to End His Pension Oversight Role
click for ginormous graphic Today’s must read is a monster piece from Business Insider (again) headlined Inside Sears’ death spiral. Recall how many people a decade ago said “Eddie Lampert is a Retail genius.” They were half right; he doesn’t know jack about retail, but as BI shows, he knows how to be on both sides…
Bridgewater’s Ray Dalio has been pushing back against the media portrayal of his firm; the latest is a skirmish caused by a recent WSJ article about the firm (his response was posted on LinkedIn). Henry Blodget of Business Insider — and a prior MiB guest — had a multi hour conversation with Dalio, by phone and by email Q&A.…
How did I miss this? (blame the elections) click for ginormous map Source: Bloomberg
The post Endowment, Pensions Hedge-Fund Love Affair Is Ending appeared first on The Big Picture.
HFs are so 20th century...
Nine years later, hedge funds have done even worse than what I showed in 2007. Charlie Bilello showed that their returns have flattened out. They are no longer correlated with equity returns.
It could be argued that HFs are absolute return vehicles and therefore it is unfair to compare them against equities. Bloomberg showed that their performance against a balanced fund benchmark has been nothing to write home about either.
The market has reacted and the latest figures show that YTD hedge fund fund flows have turned negative. YTD redemptions are 77b as of October 2016.
Alpha is hard to find
My assertion back in 2007 that alpha is hard to find turned out to be correct. Many HF strategies, such as convertible arbitrage, long/short equity, event-driven, emerging markets, and so on, can be approximated by combinations of factors. In other words, you were paying for beta when you thought you were buying alpha. Since then, even those beta strategies have turned into...I don't know what as aggregate HFRX Indices have flattened out over the last few years.
The field is getting far too crowded to extract significant alpha. Back in the early 1990's, when swashbuckling managers like Julian Robertson and George Soros dominated the field, a billion dollar hedge fund was an enormous fund. Today, a fund with AUM that size just gets lost in the crowd.
Adding value to the investment process
I am not always right, but this is just an example of the value I have brought to the blogosphere and to the investment community.
We announced the Black Friday/Anniversary promotion nine days ago. We only have a handful of discounted annual subscriptions left at a price of US$199.99, which is US$50 off the regular price of US$249.99, for the first year. This offer is open to the first 100 subscribers, or until December 15, 2016, whichever comes first. Click on this link to subscribe and use the code anniversary2016 at checkout to get the discount.
Hurry before they're all gone!
New York Pension Regulator Shellacks State for Overpaying for Hedge Fund Underperformance, Enabling Private Equity Fee Secrecy
These are tough times for university endowments — there’s the difficulty of producing consistent results; the questionable love of investments in hedge funds and private equity amid high fees and underperformance; and the challenge of having to respond tocompeting constituencies. These issues are not going away anytime soon. If anything, they are becoming more pronounced…