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Opalesque Exclusive: BGI`s Beckers: 130/30 `first step leading to decomposition of current asset management`, `Hedge funds will be the pure alpha provider, but we`re not quite there yet`, World Bank Pension: 130/30 actually acknowledges long-short is the way to go Matthias Knab reports from Tokyo: At a hedge fund conference in Tokyo this week, Stan Beckers, Managing Director and Head of Alpha Management Group at Barclays Global Investors, said the new 130/30 is a “first step leading to a decomposition of the current asset management practices.” Even today, most alternative products would come as “pre-packaged combinations of beta and alpha. Why”, he asked, should investors continue to purchase these products at inflated prices “when you can buy them separately”, he said in a session dedicated to Portable Alpha.

Hedge funds would be the alpha providers, however the industry would still be a number of years away – he mentioned “five to ten years” – before becoming “true” or “pure” alpha providers. Hedge funds must meet two conditions. First, they must become “institutional” in their size, operations and liquidity. And secondly, they must evolve to deliver the “pure alpha”.

Sudhir Rajkumar, Head of Pension Investment Partnerships of the World Bank Treasury agreed with Becker’s views. The World Bank is a long time investor in hedge funds. The rise of 130/30 would be an “acknowledgement that long-short is the way to go”. It would be another step ......................

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