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Alternative Market Briefing

The beauty of small-cap stocks

Thursday, September 15, 2016

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Dr Indraneel Das
Benedicte Gravrand, Opalesque Geneva for New Managers:

The beauty of small-cap stocks, according to hedge fund manager Indraneel Das, is in their standard deviation: "They encompass a very rich universe with a wide divergence in returns. The stock generating a 2.5-sigma return might be up 400% while the -2.5-sigma return could be -80%. That gap is the largest in the equity universe, and presents an alpha opportunity that can be exploited to create an absolute return product."

This was the vision behind Pearl Brook Capital, a Tampa, Florida-based investment firm he created in 2014. On 31st August 2014, he launched the Pearl Brook International Alpha Strategy, which invests in long/short in international small and mid cap equities.

Before Pearl Brook, Dr Indraneel Das, who has a PhD in applied mathematics, spent eight years in senior investment roles on the international small/mid-cap team at American Century Investments, an independent investment house with about $140bn in assets under management. Prior to that, he worked eight years in corporate research and strategy for IBM, ExxonMobile, Level 3 Communications and United Technologies.

"Armed by my knowledge of how corporates create value, I crossed over and became an investor myself," he told Opalesque.

The strategy aims to exploit a gap in perception. It st......................

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