Tue, Feb 21, 2017
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. People - Kuwait wealth fund head Al Saad said to step down after 14 years[more]

    From Bloomberg.com: Kuwait Investment Authority is set to name Farouk Bastaki as managing director, replacing Bader Al Saad who ran the world's fifth-largest sovereign wealth fund for 14 years, a person familiar with the matter said. The KIA, as the fund is known, is finalizing the appointment, said

  2. Manager Profile - Eddie Lampert: a painful entanglement with Sears[more]

    From Moneyweek.com: "In the long run we are all dead." Lex in the Financial Times reached for the famous quote from John Maynard Keynes in January when, after a long and unforgiving decline, the clock finally appeared to be running out on Sears, the iconic US department store group. Yet the group's

  3. Investing - Hedge funds quit Aberdeen shorts as shares begin to recover, Hedge funds' next big short: U.S. malls, O'Connor fund owns 9.5% of Protalix Biotherapeutics, U.S. hedge fund takes position in Macau hotel The 13[more]

    Hedge funds quit Aberdeen shorts as shares begin to recover From Investmentweek.co.uk: The last two hedge funds to short Aberdeen Asset Management have removed their positions, as the fund group's shares begin to show signs of recovery after a difficult few years. According to the Financ

  4. Latin America, high yields and Asia Pacific strategies dominate hedge fund returns in January[more]

    Komfie Manalo, Opalesque Asia: Latin America (+7.04%), high yield (5.63%), and Asia-Pacific (+5.06%) strategies dominated hedge fund performance in January, data provider Hennesee Fund Research said. The bottom three strategies for the mont

  5. Investing - Hedge funds loading up on this dividend stock, The biggest hedge funds have been piling into bank stocks[more]

    Hedge funds loading up on this dividend stock From Incomeinvestors.com: Hedge funds are backing up the truck on Cameco Corp stock. Billionaire Jim Simons owns 389,000 shares. Other Wall Street titans - including Ray Dalio, Ken Griffin, and Chuck Royce - have been quietly building positio