Tue, Aug 4, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Ineichen Research & Management introduces risk management research

Wednesday, October 05, 2011
Opalesque Industry Update - Economic variables are falling and risk measures are rising. This is a time to be cautious or hedged rather than courageous and unhedged.

Ineichen Research & Management Ltd. (“IR&M”) has just launched a new research product line with a particular focus on risk management. The risk management research is designed to help investors make better risk management decisions in times of heightened uncertainty.

It is becoming increasingly obvious to more and more investors that avoiding large losses and controlling risk is the key to long-term investment success.

Alexander Ineichen, founder of IR&M said: “The key discipline in investment management is risk management. There is no such thing as return management. Large losses kill the rate at which capital compounds. Controlling for tail risk and negative compounding of capital is the essence for long-term investment success.”

Current institutional asset allocation methodology has some serious shortcomings. First, it starts with the risk-free rate of return. However, the term “risk-free rate of return” is in the process of turning into the mother of all oxymorons according to Ineichen. Second, the current process relies heavily on forecasting. However, the failure of most of the financial profession to see the last crisis coming should be cause of great concern. Thirdly, over-zealous regulation is increasingly determining the asset allocation of institutions. This regulation results in de-risking and favours bonds. Portfolios of pension funds and insurers hold government bond-heavy portfolios at a time where monetary aggregates are ballooning and a 30-year bull market in government bonds might soon start to look tired.

Ineichen warns: “Applying financial orthodoxy to the current investment environment could be ill-advised or much worse.”

In IR&M’s inaugural research report ("Europe doubling down"), Ineichen also suggests “lie watching”. The influence of politics is increasingly becoming more relevant in influencing market prices and trends.

“The authorities have a different axe to grind than have investors; they often need to lie. In today’s markets, spotting the lie is not just a profitable endeavour; it is as much a survival necessity,” Ineichen said.

The research consists of a quarterly write-up of which the inaugural issue is titled “Europe doubling down” and is attached to this press release. Weekly on-screen updates have been published since 5 August 2011. Investors can require a free trail for six months. The existing “absolute returns” research will continue to be free of charge.

(press release)

www.ineichen-rm.com


See our last articles on Ineichen:
24.06.2011 Opalesque Exclusive: Alexander Ineichen’s Regulomics research shows little to cheer alternative investors Source
14.12.2010 Opalesque Exclusive: But what is real absolute return? Buyers beware, says Ineichen Source
02.12.2010 Opalesque Exclusive: A. Ineichen: the real value of hedge funds is in active risk management, not alpha Source


BG

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
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. Activist News - Celgene says patent-fighting hedge fund manager wants to short its shares[more]

    From Reuters.com: Celgene Corp, one of the world's largest biotechnology companies, has accused U.S. hedge fund manager Kyle Bass of attempting to profit from his attempts to wipe out several major drug patents through his Coalition for Affordable Drugs. The company asked the U.S. Patent and T

  2. Einhorn's Greenlight Capital hedge fund slumps 6.1 percent in July[more]

    From Reuters/Thefiscaltimes.com: Hedge fund mogul David Einhorn's Greenlight Capital slumped 6.1 percent in July and is now down 9 percent for the year after gold, one of the fund's top holdings, tumbled to five-year lows last week. Greenlight notified clients of its returns late on Friday, ac

  3. Performance - Some hedge fund small-cap energy stocks have been free falling, Dan Loeb's simple strategy destroys the market, Baupost lost 1.4% last quarter as energy bargains proved elusive[more]

    Some hedge fund small-cap energy stocks have been free falling From Marketrealist.com: According to a July 28, 2015, Bloomberg article, there was a 34% fall in small-cap energy stocks over the past three months. These shares are tracked by the Russell 2000 Energy Index. Small-cap energy

  4. Legal - Hedge funds hit Rothstein Kass with $75m malpractice suit, JPMorgan questioned on private bank’s hedge fund disclosures, Kijani fund, seized by regulators in Cayman Islands, spotlights risks in lightly regulated market[more]

    Hedge funds hit Rothstein Kass with $75m malpractice suit From Law360.com: Two investment funds have sued Rothstein Kass & Co. PC for at least $75 million, claiming the New Jersey auditing firm committed accounting malpractice by failing to properly scrutinize overblown valuations of the

  5. Assets - Hedge funds are getting smoked by the commodities slump, Global ETF assets could more than double by 2020[more]

    Hedge funds are getting smoked by the commodities slump From Businessinsider.in: The collapse in commodity prices has burnt another hedge fund. Vermillion, a commodity hedge fund backed by Carlyle Group, has seen its flagship fund's assets fall from nearly $2 billion to less $50 million,

 

banner