•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

From Kirsten Bischoff, Opalesque New York: It may be that the term alpha, very much like the hedge fund industry itself, grew to include things it was never meant to. "Many strategies engage in essentially - banking - where the manager borrows money short term and invests in illiquid things. These managers are then securing liquidity premia for these illiquid investments," David DeMers, Managing Partner and Chief Investment Officer of Black Mesa Capital told Opalesque.

Last week, an article by Opalesque's Benedicte Gravrand took a closer look at the misuse of the term alpha (see article here: Source). In it Alexander Ineichen, managing director at UBS and industry author discussed his opposition to the use of the term alpha when discussing hedge fund returns. Ineichen instead prefers to use a term called "asymmetric return" when discussing the performance profiles of hedge funds.

While many no doubt agree that Ineichen's active risk management description is applicable to what some hedge funds do, there are many funds that do seek to illustrate their proven ability to generate alpha, and Black Mesa Capital is one of them. A New Mexico-based market neutral fund which uses a quantitative strategy, Black Mesa was launched in December 2002 and is run by DeMers and his partner Jonathan Spring. The fund touts a record o......................

To view our full article Click here