Tue, Aug 30, 2016
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. Strategies - The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I, Hedge funds get more pushback on terms as enthusiasm for strategy wanes[more]

    The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I From IBTImes.co.uk: To illustrate a strategic gap common to today's portfolio managers, George Sokoloff, PhD, founder and CIO at Carmot Capital, proposes an interesting thought experiment – a breakdown of

  2. Institutional investors - Investors set to increase allocation to private debt, With investment income key, Richmond retirement system faces funding challenges[more]

    Investors set to increase allocation to private debt Investors are set to increase their allocation to private debt, with 60% revealing they believe the private debt market will grow over the next 12 months, according to a new study by Elian, a leading funds services provider. 41%

  3. Investing - Hedge funds snap up banks, unload Apple, Some of hedge funds' favorite stocks are finally starting to beat the market, Einhorn's Greenlight shifts positions, Treasury yield climbs to two-month high as Fischer joins hawks, 9 stocks smart investors put their money in last quarter[more]

    Hedge funds snap up banks, unload Apple From Barrons.com: Prominent hedge funds have a newfound love of big banks, and some have a distaste for shares of Apple, regulatory filings released last week show. The filings suggest that the funds have been pivoting their portfolios in recent mon

  4. Chesapeake energy seeks $1 billion loan to refinance debt[more]

    From Bloomberg.com: Chesapeake Energy Corp. is seeking a $1 billion loan as the company battered by cratering fuel prices and credit downgrades takes a step to address its $9 billion debt load. The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group

  5. Institutions - Nordic pension funds magnify focus on unlisted and direct investing, building up teams[more]

    From IPE.com: As bond yields remain at low or negative levels, pension funds and other institutional investors in the Nordic region are stepping up efforts to find higher returns by adding more unlisted investments to portfolios and are expanding in-house teams in order to do this, according to new