Fri, Mar 27, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
New Managers March 2012

The Analytical View
Several analysts discuss investing in new managers

Established fund firms out of favour among researchers

Emerging managers lap investment elephants: Ted Krum

Ted Krum

In his update paper on fund performance, No Contest: Emerging Managers lap investment elephants, Ted Krum, Vice President and senior investment program manager at Northern Trust, a large wealth and asset manager, may be talking about long-only funds, but, he told Opalesque, a lot of it applies to hedge funds too.

In his eighth study of emerging fund managers (in the last 20 years), which are defined as the smallest firms making up the last 1% of institutional market share, the paper finds that once again they often can provide better returns and, strikingly, better downside performance than the household names. By 2010, the median small manager outperformed the median large firm by 72 basis points per year; furthermore the largest investment firms kept on getting larger (even with weak returns).

"In the last 20 years, there were times when small managers did not outperform the large ones," he explains. "In particular, in a market environment which has a lot of liquidity being dumped onto the financial markets, some of the smaller managers may find it difficult to keep up because the bigger firms, in ever increasing concentration, will be making up the majority of the market."

But the consistency that he found each time in his research is the greater dispersion; emerging managers do not always outperform but their results are more dispersed with higher highs and lower lows.

"As larger firms make up the majority of......................

To view our full article please login

This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
New Managers
New Managers
New Managers

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. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. M&A - Hedge funds no longer attractive targets for banks, reinsurers, Blackstone buys stake in Christopher Pucillo’s Solus event-driven hedge fund[more]

    Hedge funds no longer attractive targets for banks, reinsurers From Institutionalinvestor.com: Swiss RE, the world’s second-largest reinsurer, is looking to sell its 15 percent stake in Jersey, Channel Islands–based hedge fund firm Brevan Howard Asset Management. Morgan Stanley reported

  4. Opalesque Radio: Threadneedle expects continuing equity volatility this year[more]

    Benedicte Gravrand, Opalesque Geneva: Investors should expect more volatility, which is signaling a "slow moving" top to the market, KKM Financial’s founder and CEO Jeff Kilburg told CNBC on Monday. And this volatility is going

  5. Hedge funds show strong performance of 2.52% so far in 2015[more]

    Komfie Manalo, Opalesque Asia: The hedge fund industry got off to a strong start in 2015 "completely unmindful" of the poor performance last year, according to data provider Preqin. According to Preqin, following a year which saw the average he

 

banner