Mon, May 1, 2017
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 Exclusive: Ex-Man manager combines sustainable investing with AI/ML[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Dr. Richard Bateson, quant fund manager and physicist, has recently

  2. Other Voices: "Winner-take-all" dynamics and hedge fund investing[more]

    A growing stream of thinking in microeconomics is the concept of "winner-take-all" dynamics. The idea seems simple. A combination of networking economics and classic economies of scale creates situations where there are just a few dominant firms or economic agents who are able to capture significant

  3. Investing - How Chipotle's comeback attracted big data robots and value investors alike[more]

    From Forbes.com: When William Ackman's ailing hedge fund Pershing Square Capital Management bet $1 billion on shares in Chipotle Mexican Grill beginning in July 2016, the stakes couldn't have been higher. Pershing Square was reeling from what would eventually be a near $4 billion loss in drugmaker V

  4. Gondor Capital sees challenges ahead for financial markets as two hedge funds post strong gains in Q1[more]

    Komfie Manalo, Opalesque Asia: Vincent Au, portfolio manager of New York-based hedge fund firm Gondor Capital Management believes that the remaining of the year would be challenging for the financial markets even as his two hedge funds maintain

  5. Service Providers - Colemore launches fee tracking service for limited partners[more]

    Following Colmore's successful launch in January 2017, the firm has announced the launch of FAIR.. FAIR is designed to help private equity investors independently validate fees and incentives charged by underlying managers, saving time and providing an extra level of comfort. There is a glob