Sun, Mar 26, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: A practitioner’s scorecard to hedge fund replication

Monday, January 20, 2014

amb
Andrew Beer
This article was authored by Andrew Beer, founder of Beachhead Capital Management LLC in New York. Below is the first part; you can download the full version of the article here.

There is a great deal of confusion about how to measure the success of hedge fund replication – in a sense, to answer the question, "Has hedge fund replication worked?" In this note, we provide a candid assessment of the successes and failures of the space and introduce a framework of five criteria – a "scorecard" – as a guide for potential investors.

On the one hand, replication products overall have fulfilled the original promise of delivering "hedge fund returns" but with much lower all-in fees and daily liquidity. Specifically, over the past five plus years an array of replication products has delivered returns comparable to funds of hedge funds and, more importantly, outperformed managed account platforms, UCITS funds and investable hedge fund indices.

On the other hand, potential investors often are put off by the complexity and opacity of many such products – especially those offered by investment banks. We attribute this frustration to unrealistic expectations, set by the banks themselves, that the strategy should be as simple and predictable as "investing in the S&P 500 index" – that is, a default allocation that requires minimal due diligence with de mi......................

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. Hedge fund liquidations in 2016 surpass 2009 levels, new launches decline[more]

    Benedicte Gravrand, Opalesque Geneva: Even as the hedge fund industry's total assets exceeded the $3tln milestone last year, hedge fund liquidations increased. So much so that 2016 had the highest number of liquidations since 2008, claims the latest HFR Market Microstructure Report, re

  2. Hedge funds find no joy in macro as returns lag Trump rally[more]

    From Gulfnews.com: In 2017, macro hedge funds were expected to shine. So far? Not so much. It's been a far from impressive first two months for funds that trade around macroeconomic events. Discretionary funds rose just 0.3 per cent through February, according to Hedge Fund Research Inc., while the

  3. Strategies - Billionaire investor Marc Lasry shares how he's playing markets right now, Classic models are failing FX hedge funds desperate for return[more]

    Billionaire investor Marc Lasry shares how he's playing markets right now From CNBC.com: Buy on the prospect of deregulation. Sell on the enactment of deregulation. That's the strategy that billionaire investor Marc Lasry is implementing, according to an interview with CNBC in Las Vegas

  4. Opalesque Exclusive: Aberdeen makes the case for the lower mid-market[more]

    Bailey McCann, Opalesque New York: Aberdeen Asset Management has released a new paper focused on lower mid-market private equity. According to the paper, this segment of the private equity market is gaining popularity with private equity investors that are looking for multiple expansion and less

  5. Hedge funds await outcome of French elections, feel pinch on lower oil prices & weak dollar[more]

    Komfie Manalo, Opalesque Asia: Hedge funds felt the pinch of lower oil prices and weak U.S. dollar as the Lyxor Hedge Fund Index was marginally down as of the week ending 14 March, Lyxor Asset Management said in its Weekly Briefing. The Lyxor He