Thu, Dec 13, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: 6 Phrases that hedge funds should never use

Wednesday, June 06, 2018

By Sara Grillo, CFA (www.saragrillo.com)

I'm sure I'm going to incite the ire of half of Opalesque with this one, but here are 6 most cringe-worthy phrases that hedge fund managers use. These hedge fund phrases are clearly ridiculous and any fund who is using them should think about replacing this jargon with language that carries more meaning.

  • Equity-like returns with bond-like volatility

    You've seen this before in hedge fund pitch books, right? "Our fund achieves equity-like returns with bond-like volatility."

    Ummm, that is, maybe it did achieve these returns-- until the first sign of real market volatility in 2008 when the whole thing blew up because of its 6,000 times leverage.

    The first problem I have with this expression is that although it sounds nice, very few hedge funds actually achieve 15% (or higher) annualized returns with 1-2% volatility on a consistent basis, despite whatever their pitch books claim. If that were true then there would be a whole lot more competition for the big players (Och Ziff, Baupost, Adage, Millenium) and there isn't. The industry is bifurcated; the funds who do outperform holding most of the capital and rest competing for the crumbs.

    Secondly, even if they are achieving this, the way they're doing it has little to do with traditional equity or fixed income investments. They do it using sophisticated trading strategies using derivatives that cost a ......................

    To view our full article Click here

  • 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. Brexit: Hedge funds make big bets against post-Brexit UK economy, Hedge funds rent a lifeline to stay afloat in EU post-Brexit, Treasury green-lights sale of new EU funds into UK[more]

      Hedge funds make big bets against post-Brexit UK economy From The Guardian: A pair of hedge funds owned by prominent Brexit supporters have made significant bets against companies exposed to the British consumer including big high street names. Odey Asset Management, part-owned by Cr

    2. Trends: Licking their wounds, fund managers prep for rally in '19, Concerns rising over leveraged loan market[more]

      Licking their wounds, fund managers prep for rally in '19 From Reuters: With bond and equity markets from the United States to emerging markets all on pace to lose money this year, investors have not seen this much red on their screens since 1972, the last time no asset class returned at

    3. New Launches: Swiss boutique launches EM impact bond fund, Jungle Ventures to raise $200m third venture capital fund, CPR AM licences five funds with new climate rating, Sailing Capital seeks $1.5bn for second fund, Liquid multi-strategy alts focus of new Schroder fund, Vivo Capital rakes in $864m, Swiss group launches sustainable European small-cap fund[more]

      Swiss boutique launches EM impact bond fund From City Wire: Swiss impact investmenting boutique BlueOrchard has launched a Ucits-complaint impact bond fund. The Luxembourg-domiciled Emerging Markets SDG Impact Bond fund will allocate to companies in emerging and frontier markets and aims t

    4. Institutional Investors: PennPSERS earmarks $450m for 3 funds, adds new funds to DC lineup, Qatar Investment Authority has accelerated investments in technology, Elon Musk says he would no longer accept Saudi investment, San Francisco City & County Employees slates $192m for alternatives[more]

      PennPSERS earmarks $450m for 3 funds, adds new funds to DC lineup From PIonline.com: Pennsylvania Public School Employees' Retirement System, Harrisburg, allocated $450 million to three investment funds and added 11 new funds to its defined contribution lineup, confirmed Evelyn Williams,

    5. Emerging technologies, defensive investment strategy on top asset owners' minds: State Street[more]

      Laxman Pai, Opalesque Asia: Nearly half (48%) of the institutional investors surveyed identified emerging technology as a top enabler of growth over the next five years, revealed a study. According to a new research from State Street, the participants identified blockchain, artificial intell