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Alternative Market Briefing

Finding value, and true alpha in a fund of funds

Tuesday, December 04, 2012

Bailey McCann, Opalesque New York:

Ayaltis is a Swiss-based fund of funds supported by various, substantial family offices which separates it from other fund of funds in the space, according to its Chief Investment Officer and Co-founder, Ernesto Prado. He spoke about what these family offices allow his firm to do in a recent Opalesque TV interview with Matthias Knab.

Backed by the support of family offices, Ayaltis is able to pursue a more decisive set of opportunities according to Prado, which translates into performance and the ability to explore more interesting opportunities. Prado himself is originally from the proprietary trading world, and has translated that experience into his work at the firm. During his work as a proprietary trader for Salomon Brothers, Prado developed expertise in sovereign bonds, derivatives, corporate bonds, and various structure products, from mortgage-backed securities, to CDOs.

Now, he uses that understanding to take a deep dive into poorly performing securitized assets to understand what is healthy and what isn’t. Pairing those aspects in a new ways has allowed the firm to realize returns in a new opportunity set.

"Most of the markets believe that hedge funds to actively hedge have to match long with a short to hedge. Well, I was taught to understand that you don't necessarily to match long with a short to be hedge. You can match two l......................

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