Sat, Feb 13, 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. Investing - Real estate secondaries sole 'bright spot' in 2015, As hedge funds stumble, one firm prepares to buy illiquid stakes[more]

    Real estate secondaries sole 'bright spot' in 2015 From IPE.com: The secondary market for property was the sole “bright spot” over the course of 2015, as hedge fund secondaries saw deals fall by two-thirds, according to a wide-ranging survey of the market. Setter Capital said 2015 saw th

  2. Asia - Hedge fund manager Kyle Bass estimates China's foreign reserves below critical level[more]

    From Nasdaq.com: Investor Kyle Bass stepped up his attack on China's currency, arguing in an investor letter distributed Wednesday that the second-largest economy's foreign reserves are "already below a critical level." The comments mark the latest effort by hedge funds and other investors to raise

  3. Investing - Some hedge funds want to make subprime auto loans next big short, 11 hedge funds that are “all in” on the FANG stocks, Hedge funds short London luxury homes, Cynet raises $7 million from U.S. hedge fund[more]

    Some hedge funds want to make subprime auto loans next big short From Bloomberg.com: A group of hedge funds, convinced they have found the next Big Short, are looking to bet against bonds backed by subprime auto loans. Good luck finding a bank willing to do the trade. Money manage

  4. Investing - Hedge funds see selloff in European bank stocks as buying opportunity[more]

    From WSJ.com: The massive selloff in European bank stocks and bonds is overdone and presents a “phenomenal” buying opportunity, according to some of Europe’s top hedge-fund managers. Despite a 28% slump in European bank stocks this year, including a 38% fall in Deutsche Bank AG and a 34% drop in Soc

  5. Legal - Carlyle accused of fraud by ex-employee, Hedge funds win CDS breach of contract suit against Deutsche Bank, Hedge fund asks for OK on $27.5m Goldman CDO deal, SFO examines Barclays hedge fund profits[more]

    Carlyle accused of fraud by ex-employee From AI-CIO.com: A former portfolio manager claims he was fired for blowing the whistle on “crazy” and “irresponsible” investments. Carlyle Group has been sued by a former portfolio manager for one of its hedge funds, who accused the firm of “knowi