Opalesque Industry Update - EDHEC-Risk Institute has announced the creation of a spin-off, EDHEC-Risk Indices & Benchmarks, which aims to be one of the leading beta designers for the investment industry. EDHEC-Risk Indices & Benchmarks will be based in London, New York, Nice and Singapore and has recruited two experienced executives to spearhead business development in Europe and North America. Profiles of these new recruits, Eric Shirbini and Vijay Vaidyanathan, can be found overleaf. |
Professor Noël Amenc, Director of EDHEC-Risk Institute and Chairman of EDHEC-Risk Indices & Benchmarks said, “EDHEC-Risk Indices & Benchmarks hopes to be perceived as a concept and implementation provider for smart beta. We believe that the index and benchmarking research that EDHEC-Risk Institute has conducted since it was founded in 2001 has led to a series of products that provide more efficient and more academic-based solutions to investors’ needs than the indices and benchmarks currently available on the market. EDHEC-Risk Indices & Benchmarks is the channel through which these solutions will be made available to the investment community.”
The creation of EDHEC-Risk Indices & Benchmarks is part of an evolution in the asset management industry whereby passive investment is becoming increasingly important. In such a context, the selection of the right benchmarks will totally condition the risk-adjusted return of investors’ core allocation. For EDHEC-Risk Indices & Benchmarks, being an informed passive investor thus assumes being attentive to the choice of benchmark. That is the context in which EDHEC-Risk Indices & Benchmarks has been set up. The subsidiary of EDHEC Business School is positioning itself as an intellectual property provider in the area of beta design for all passive investment players, whether index providers or managers.
The new structure will host the range of existing index and benchmark products currently offered by EDHEC-Risk Institute, including:
• The FTSE EDHEC-Risk Efficient Index series. These indices, launched at the beginning of 2010, are offered for a full global range, including All World, All World ex US, All World ex UK, Developed, Emerging, USA, UK, Eurobloc, Developed Europe, Developed Europe ex UK, Japan, Developed Asia Pacific ex Japan, Asia Pacific, Asia Pacific ex Japan, and Japan. Developed on the basis that the goal for a rational investor is to hold a portfolio that achieves the highest risk-adjusted performance, the index series aims to capture equity market returns with improved risk/reward efficiency compared to cap-weighted indices.
• The EDHEC-Risk Alternative Indexes. EDHEC-Risk launched its composite hedge fund strategy indices in 2003. Using factor analysis techniques, these indices are built as the best one dimensional summaries of the information conveyed by competing indexes for a given style. The EDHEC composites are thus able to capture a large fraction of the information contained in the competing indexes while implicitly minimising their various biases.
• The EDHEC IEIF Commercial Property (France) Index, launched in 2008, uses unlisted property funds under the French SCPI scheme as the index underlying, given a certain liquidity threshold. The index has attractive diversification properties and is representative of the commercial property market. It is also fully transparent and investable and has little exposure to financial market risk. These characteristics make the index an interesting underlying for index-based products that could satisfy the demands of institutional investors.