Thu, Jul 31, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Risk parity funds gain traction with investors, new paper looks at performance

Monday, July 29, 2013

Bailey McCann, Opalesque New York:

Investors are showing an increased interest in risk parity funds and strategies. On the retail side, assets are piling in - just over $16bn has gone into risk parity funds just in the last year, according to Lipper. Risk parity strategies have their roots in some of the biggest funds out there including Bridgewater, however, the recent rise in investor interest has been during a low interest rate environment. Now, as rising interest rates are on the horizon, Salient Partners, is out with a new paper on how these strategies might perform during a rising rates regime.

Salient Partners is a Texas-based $18bn asset manager, which most recently launched an alternative beta fund. According to Lee Partridge, Salient’s Chief Investment Officer, the firm wanted to take a look at how these strategies would hold up during a rising rate environment, as a number of investors haven’t experienced a regime of significant and sharp increases.

To do this, the paper goes back to 1971, looking at the period between 1971 and 1982 the last real rising rates regime. "We know what happened in 1994, and 1994 wasn’t that bad," Partridge tells Opalesque. "If you look at risk parity strategies in that period, they underperformed but, we don’t think 1994 is as analogous to present day, as the rate rises starting in 1971."

The paper br......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Roundtable: Success in hedge fund marketing not linked to performance, but investor appetite[more]

    Komfie Manalo, Opalesque Asia: Success in marketing a fund is not linked to the performance, but to investor appetite, to the way you can market the fund, and to how much time you can spend to raise assets, said Antoine Rolland, the CEO of incubator and seeding firm

  2. Hedge fund manager Winton Capital making headway with long-only strategy[more]

    From PIonline.com: North American investors are helping Winton Capital Management Ltd. make progress — albeit slowly — toward its founder's goal of becoming a $100 billion company. The firm's ticket to quadrupling its assets under management is unlikely to be one of its scientifically designed manag

  3. Opalesque Radio: Now is a good time to buy protection cheaply in the options market[more]

    Benedicte Gravrand, Opalesque Geneva: Investors are showing an increased interest in risk parity funds and strategies, Opalesque reported last year. Risk parity strategies have the

  4. The Big Picture: Charlemagne Capital smoothes risk out of frontier market investing with portfolio approach[more]

    Benedicte Gravrand, Opalesque Geneva: Opalesque recently talked to one of the portfolio managers of the Oaks funds, which are emerging and frontier market hedge funds focusing on equity long/short with a directional approach. They are run by

  5. Winton’s low-cost equities fund tops $1bn for first time[more]

    From FT.com: Winton, the London-based hedge fund, has increased the assets in its low-cost equities fund to more than $1bn for the first time in a sign that traditional stock managers may come under increasing pressure from computer-driven rivals. Winton, which manages about $25bn in total ass