Sat, Oct 29, 2016
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Roadmap to absolute returns, part 1

Monday, October 28, 2013

Rene Levesque
By: Rene Levesque, Founder, Mountjoy Capital

"Past Performance Is No Guarantee Of Future Results" The studies are well documented on the fact that manager selection based on trailing performance metrics is a losing proposition. Chasing return profiles ultimately results in disappointments for the investor. New research now suggests a mean-reversion theory: outperforming and underperforming fund managers across the world showed the idea of mean reversion to be factually correct, suggesting that strong periods of outperformance can be followed by less attractive results, and that frequently strong periods of underperformance can be followed by improved returns.

Qualitative versus Quantitative

Quantitative tools do in fact help in building a case to justify manager selection decisions with evidence of hard data under the scrutiny of the investment committee members. Quote: "A judicious man uses statistics, not to get knowledge, but to save himself from having ignorance foisted upon him." (Thomas Carlyle) The process has evolved into a culture that imposes quantitative filters on a discipline better referred to as an art rather than a science. Plainly, the justification process has somehow drifted as the core of the evaluation and decision-making process; while the two being two very distinct activities.

The problem is acutely applicable in the evaluation and selection of abs......................

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. David Einhorn speaks on passive investing, Mylan, his cheapest stock, the Fed[more]

    From Greenlight Capital hedge fund manager David Einhorn (Trades, Portfolio) joined nine other famed investors on Tuesday to talk about stocks at the annual Great Investors’ Best Ideas Investment Symposium in Dallas. Presenters at the annual conference typically pitch one or severa

  2. Investing - Fund set up to buy illiquid hedge fund stakes finds plenty of opportunities, Lansdowne's Roden says likes animal genetics company Genus[more]

    Fund set up to buy illiquid hedge fund stakes finds plenty of opportunities From As ValueWalk reported back in February, earlier this year Andrew Lawrence set out to raise $250 million to $500 million for a fund that will buy stakes in hedge funds that have suspended redem

  3. Other Voices: Don’t mistake style for skill — The impact of style factors on trend follower performance[more]

    By John Dolfin, CFA Chief Investment Officer and Christopher Maxey, CAIA, Senior Portfolio Manager of Steben & Company: Managed futures have become an alternative asset class that is widely used by investors seeking overall portfolio diversification and absolute returns independent of the

  4. Opalesque Roundtable: Style drift, poor communications and credibility fatigue are biggest red flags for hedge funds investors[more]

    Komfie Manalo, Opalesque Asia: Style drift, poor communications and credibility fatigue are the biggest red flags for hedge funds investors, said participants of the latest 2016 Opalesque Investor Roundtable, sponso

  5. Barclay CTA Index down 0.40% in September (+0.10% YTD)[more]

    Managed futures traders lost 0.40% in September according to the Barclay CTA Index compiled by BarclayHedge. The Index is up 0.10% year to date. “The US Fed, in spite of its hawkish tone, opted to hold rates steady which roiled financial markets,” says Sol Waksman, founder and president of BarclayHe