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Alpha Related News
in chronological order
See also: Alpha Related Books,
Alpha
Related Scholarly Papers,
or
Alpha Home
Page.
Table of Contents:
- March
2007
- February
2007
- January
2007
- October
2007
- September
2007
- July
2007
- June
2007
- May
2007
- April
2007
- January 2007
- December 2006
- September 2006
- August 2006
-
July 2006
-
June 2006
-
May 2006
-
April 2006
-
February 2006
- January 2006
-
July 2005
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Mass. PRIM
Seeks Portable Alpha Managers
March 19, 2006
From FINalternatives:
The
$51.8 billion Massachusetts Pension Reserves Investment
Management Board is looking for firms to provide portable alpha
fund of hedge funds services to the system, and has issued a
request for proposals to search for qualified candidates.
The mandate is meant to build a complimentary lineup of fund of
hedge funds to manage up to $600 million.
Source
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Pursuing
Alpha In A Well-Diversified IRA
March 17, 2006
From Yahoo! Finance:
Alpha has become one of the hottest investment concepts of the
modern era, despite the fact it is often misunderstood by
investors and sometimes misused by the investment industry. For
example, you may hear investment managers (especially hedge
funds) talk about an "alpha-generating fund". You also may see
examples of funds that point to their benchmark-beating
performance as evidence of the alpha they are creating.
Fortunately, this concept is simpler than it sounds and, when
implemented in a well-diversified IRA portfolio, can have
tremendous benefits for investors who take the time to learn how
to use it.
Source
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All in pursuit of
short supply alpha
February 11, 2006
From Financial Times:
The people who run funds of hedge funds routinely comment that
there may be 15,000 hedge funds on the market, but only 150 or
so make the grade. Presumably they are not the same 150 across
the board, or the performance of funds of funds would be within
a small range. Presumably, also, the qualifying 150 change over
time, given that another standard observation is that hedge fund
performance deteriorates after about three years.
But that still leaves only a relatively small proportion of the
available hedge fund universe judged to be of sufficient quality
by those in the know. Who judges the fund of fund managers? Is
the ratio of quality to quantity a similar one? These are
important questions judging by the opinions expressed in a
survey by Watson Wyatt, in association with the Financial Times.
Source
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Seeking Alternative Beta Instead of Nebulous Alpha
February 8, 2006
From Seeking Alpha:
Some investors tell Mark Armbruster his strategy's boring.
"But I think of it as powerful in its simplicity," said the
Rochester, N.Y.-based advisor. "We don't focus on what's proven
not to work, like timing markets. We think using decades' worth
of academic research stacks the odds in our favor over time."
Source
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Alpha investing: Super geeks
January 22, 2006
From Canadian Business Online:
If
you’re in the market for investment advice, you’ll hear a lot
about “alpha.” It’s a trendy term. Money managers brag about
their ability to churn out alpha, a magazine called Alpha caters
to hedge fund executives, and the Financial Times of London
calls its investing blog Alphaville.
So what is alpha? The term comes from the geeky realm of
financial theory—more specifically, from what’s known as the
Capital Asset Pricing Model, or CAPM (pronounced cap-em) for
short. The fi- nance professors who invented CAPM were looking
for a unified theory to explain what makes the market tick. They
argued that in a logical universe any investment’s expected
return should be in line with its risk. Rational investors
should demand a higher payoff from investing in dicey assets
such as gold mining stocks than they do from holding boring,
safe investments such as government bonds. On average, high risk
should be reflected in high returns.
Source
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Currency alpha performing well
January 22, 2006
From Global Pensions:
Pension funds may finally be reaping the benefits of currency
alpha products, according to BNY Mellon Asset Servicing.
The SEB Mellon Currency Index, which measures pure currency
returns, showed after a poor 2006, returns in 2007 were up to
1.05% net of fees and interest.
Source
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Aberdeen alpha
October 15, 2006
From Financial Times:
Not so long ago Aberdeen Asset Management was a broken business,
with its senior executives facing the regulatory gallows and a
good portion of its clients ruined.
So it is probably fair to say that the three year turnaround
under chief executive Martin Gilbert has been nothing short of
miraculous.
Source
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Vermont Seeks
Portable Alpha Managers
October 12, 2006
From FINalternatives:
The Vermont Pension Investment Committee is seeking proposals
from investment management firms to manage a portable alpha
mandate for the Vermont State Retirement System’s $3.3 billion
defined benefit pension plan.
The mandate for a Lehman Aggregate Index Portable Alpha Program
will be for approximately $210 million.
Source
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Climate Change
and Alpha Commoditizing
October 11, 2006
From SeekingAlpha:
Roughly a year ago, I wrote a post discussing the concept of
alpha (that rare and valuable thing) which becomes less rare and
eventually commoditized into beta in time. Here’s a bit of what
I said at that time:
Isn’t alpha supposed to be the returns from a strategy that is
based on market inefficiencies? If so, then shouldn’t these
market inefficiencies disappear as other players enter the
field? This line of thinking is discussed in this paper
available on SSRN:
Source
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Alpha, Beta
Measure A Stock's Volatility
October 8, 2006
From Investors.com:
You don't need to know Greek to be able to read and understand
alpha and beta.
The two statistics are quick measurements of what you can expect
from a stock in terms of volatility.
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Research and Markets : Active Alpha: A Portfolio Approach to
Selecting and Managing Alternative Investments
October 2, 2006
From Yahoo! Finance:
Research and Markets (http://www.researchandmarkets.com/reports/c70212)
has announced the addition of Active Alpha: A Portfolio Approach
to Selecting and Managing Alternative Investments to their
offering.
There is a developing trend among institutional investors to
consider alternative investments (hedge funds, private equity,
real estate, and hard assets) as a group of assets driven by a
series of measurable return and risk factors. Heretofore, many
investors have added these investments purely on the initial
merits of diversification and return, without a sophisticated
approach to integrating them into a risk budgeting and portfolio
construction process. However, there is a much richer way to
conduct this implementation using factor and cash flow analysis,
to identify common investment and structural factors and more
accurately understand the correlations among these investments.
This understanding will lead to far more accurate portfolio
construction with fewer redundancies and greater efficiency.
Benefits from this include more precise answers to how much of
each alternative asset class should exist in a traditional
portfolio, in what combinations, and how rebalancing should be
conducted based on forward-looking favor views combined with
current factor exposures for each alternative investment.
Answers to these provide a roadmap with quantitative and
qualitative underpinnings for the migration of traditional
investors to the nirvana that they see but have yet to
organizationally attain, which is exemplified by sophisticated
endowments such as Harvard University and Yale University.
Source
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Translating skill to superior investment outcomes
September 26, 2006
From MoneyManagement.com.au:
Total investment return outcomes are driven by market exposure
as well as (potential) alpha.
Strong investment markets help to deliver outcomes that meet
investor return expectations.
Alpha, the value added by skilful active investment management
in addition to relevant market exposure, is useful in expanding
these return outcomes, especially so when market returns are
lower or more volatile.
Source
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The Portable Alpha Handbook Profiles the Fastest Growing Areas
of Investment Management
September 24, 2006
From BusinessWire:
Research and Markets (http://www.researchandmarkets.com/reports/c69329)
has announced the addition of “Portable Alpha Handbook” to their
offering.
The Portable Alpha Handbook was published as a response to the
immense surge of interest in one of the fastest growing areas of
investment management today, you can be sure that this Handbook
will only contain exclusive research from the professionals that
matter, the companies that matter and that our readers will
benefit directly from our efforts to unravel the hype behind
portable alpha.
Source
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Fidelity's Alpha Managers
July 19, 2006
From Forbes:
As our
mid-year manager rankings of Fidelity stock and bond funds
reveal, Fidelity managers are, as a whole, back on the
out-performance track. Call them the "alpha" fund managers. More
than two-thirds of Fidelity's diversified growth fund managers
are beating their market benchmarks so far this year.
More than 80% of Fidelity's international fund managers are
doing likewise. And more than half of the Select fund managers
are also fairing well--a key group, as you know, since this is
the proving ground prior to taking on the brass ring of a
larger, diversified fund. On the fixed-income side of the fence,
Fidelity continues to exhibit what we've discussed in detail
time and again: It has some of the best bond fund managers, bar
none.
Source
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Are China's
hedge funds delivering alpha?
July 18, 2006
From AsianInvestor.net:
Not surprisingly, the strong gains made by China’s equity
indices over the last 18 months have been reflected in the
performance of China-oriented hedge funds.
Similar spectacular returns have also been recorded by
exchange-traded funds and mutual funds, which raises the
question: is it worth paying base and performance fees of up to
22% to a hedge fund manager? Are hedge funds in China delivering
alpha and decent risk-adjusted returns, or are they a bunch of
closet index trackers?
Source
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'Alpha Hunters'
war with 'Beta Builders'
July 2, 2006
From MarketWatch:
Warning: Wall Street's high-tech "Alpha Hunters" (benchmark
beaters) are in an aggressive psychological war with America's
95 million Main Street investors, the "Beta Builders," average
folks who are happy with portfolios that match the market
averages.
Strip away all the esoteric rhetoric about Modern Portfolio
Theory, the Capital Asset Pricing Model and Efficient Market
Hypothesis and you'll see that Peter Bernstein's brilliant new
book, "Capital Ideals Evolving," is the perfect combat training
manual for these Alpha Hunters in a war worth over $200 billion
annually to Wall Street.
Source
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Alpha Dialogue Advisors to Host the 1st Alpha Investment Forum
(Japan)
July 1, 2006
From EarthTimes.org:
Alpha Dialogue
Advisors, LLC, a NY and Tokyo-based consulting firm specializing
in independent, cross-border capital introductions, strategic
investor relations, investment forums and market intelligence
research announced today that it will host the 1st Alpha
Investment Forum Japan (http://www.alphaforums.com/) on Tuesday,
July 10th in Tokyo, Japan. Alpha Dialogue has already conducted
three forums in New York this year. The investor-only,
invitation-only Japan forum seeks to provide an independent
platform where the Japanese institutional investors can network
with and research the quality alternative investment managers
from overseas.
According to Alpha Dialogue's Japanese institutional investors
survey conducted in February 2007, the majority of Japanese
investors have access to merely less than 10% of the
approximately 10,000 hedge fund universe worldwide. The firm
attributes its launch of Alpha Investment Forum to the
investors' strong demand for direct interaction and knowledge
exchange with the quality foreign managers. (For the survey
details, see the firm's article in the June 2007 issue of
Criteria's "Alternative Investment" magazine.)
Source
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Enhanced index tips
over $10bn
June 19, 2006
From The Financial Standard:
State Street Global
Advisors’ Global Index Plus strategy has attracted more than $10
billion in funds under management, clocking more than a billion
each year since launch, as more super funds shift their money
from ‘vanilla’ index portfolios to those with 'alpha' returns.
Global Index Plus (GIP) uses an ‘active enhanced’ index approach
meaning they use quantitative techniques to build portfolios
that mimic benchmarks but including a filtering process that
puts more investments in the top stocks within each country and
industry while maintaining the risk profile of an index
strategy. Since the product’s 2000 launch, returns have ranged
from 0.61 per cent to 2.14 per cent above benchmark before tax
and fees.
Source
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St.
Louis school fund to look at portable alpha
June 18, 2006
From Pensions & Investments:
St.
Louis Public School Retirement System officials will hear a
presentation on portable alpha strategies by consultant New
England Pension Consultants, according to the agenda for its
Thursday investment committee meeting. NEPC will discuss the
possibility of inviting several money managers that offer the
portable alpha investment strategy to a future investment
committee meeting. Andrew Clark, executive director for the $1.1
billion pension fund, was not available to provide further
comment at press time.
Source
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Goldman's negative alpha
May 30, 2006
From BloggingStocks:
The Goldman Sachs
Group's (NYSE: GS) Global Alpha Hedge Fund has lost 3.4% of its
value so far in 2007, according to Bloomberg News.
It sure sounds smart to use Greek letters in the name of your
hedge fund. Those who have taken basic finance know that the
Greek letter Beta refers to the extent to which an investment's
return varies with the market's rate of return; whereas Alpha
denotes returns in excess of the market rate. That -- and the
dual meaning of Alpha as the top dog -- is why the hedge fund
industry's leading magazine is called Alpha.
Source
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First
Trust places a wager on the alpha craze
May 29, 2006
From InvestmentNews:
First Trust Advisors
LP is betting that investors will want exchange traded funds
that seek alpha.
The Lisle, Ill.-based firm launched 16 ETFs this month pegged to
AlphaDEX indexes, designed to better their benchmarks. But
claiming to be able to deliver alpha via an ETF — although
somewhat controversial — is nothing new, according to some
financial advisers and industry watchers.
Source
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130/30 Funds: More Asset Gathering Than Alpha Generation
May 8, 2006
From SeekingAlpha:
I've remained silent
for some time about this latest marketing tool engineered to
separate people from their money. And we know it's all about the
money, right? Or is it about alpha? Hmm, I'm not sure.
Anyway, it's not that there is anything inherently wrong with
running a (hedge) fund - call it what you will - 130 long and 30
short. It's just that calling it "revolutionary" or "new" is
silly beyond belief. And this blurb from Saturday's New York
Times just pushed me over the edge; "Hedging Hedge Funds." Are
you kidding me? "Hedge Funds and Adverse Selection" is more like
it.
Source
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Small Investors:
Beating the Market
May 7, 2006
From SeekingAlpha:
I'm going to try and
begin to answer the existential question: How can I possibly
hope to beat the market, when "the market" consists of
professional money managers with resources far exceeding my own?
Every active investor should ask themselves this question: the
answer will either make you a better investor, or save you a lot
of time and money if you are humble enough to realize that
you're like the majority of mutual fund managers who would be
better off not trying, and should be indexing their portfolios
instead.
Source
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BlackRock points Absolute Alpha at fund platforms
April 17, 2006
From Citywire:
BlackRock is
planning to move the ML UK Absolute Alpha fund managed by
Citywire AAA-rated Mark Lyttleton to daily pricing to allow it
to sit on fund platforms.
The fund, which was launched in May 2005, aims to achieve
absolute returns throughout the market cycle but its use of
derivatives means that it has been structured with valuations
which occur once every two weeks. While the fund has attracted
assets of over £100 million since launch it has not featured on
any fund platforms.
Source
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Hedge funds have lost 'alpha,' Merrill director says
April 17, 2006
From MarketWatch:
Merrill Lynch & Co.
managing director Heiko Ebens had an awkward message for hedge
fund managers and investors attending the 2007 MARHedge
conference in San Francisco on Tuesday.
"Alpha has essentially disappeared" from the hedge fund
industry, said Ebens, who heads equity derivatives strategy for
Merrill in the U.S.
Source
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Casey Quirk Report Lists Portable Alpha, LDI, 130/30 As 'Up and
Coming'
April 10, 2006
From SeekingAlpha:
Consultant Casey Quirk and database provider eVestment Alliance
published their “2007 Consultant Search Forecast” last week.
In a clear reaffirmation of our mission at AllAboutAlpha.com,
the report listed portable alpha, liability-driven investing and
130/30 as “up and coming” while it listed hedge funds as
“highest opportunity”
Source
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ALPHA DOGS
April 2, 2006
From FMNN:
God must love
typical investors; he created so many of them. But he cursed the
poor yahoos to mediocrity. They can't get 'alpha' (above market
performance), say the theorists, because they can never know as
much as the market itself.
For the average investor, it is true; he can do no better than
average. Match his little wits against 'the market'? Don't make
us laugh.
Source
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Why Hedge
Fund Regulation is All About Alpha
January 30, 2006
From SeekingAlpha:
“Alpha-centric
investing” refers to more than just “portable alpha”. As we have
reported on this blog, it encapsulates new operational
infrastructures [UMAs], new fee arrangements (performance fees
with benchmark hurdles / fee-per-alpha), new metrics (ranking
funds based on alpha instead of absolute returns), new
organizational structures (small teams of alpha producers), and
new advisory models (fee-based vs. commission-based). A recent
investment newsletter highlights another domain that is impacted
by this simple idea: regulation.
In his January 26th weekly newsletter “Accredited Investor”
author John Mauldin covers the SEC’s proposed new hedge fund
investment eligibility rules (which, as an aside, come attached
to new anti-fraud provisions that confirm it is still illegal to
break the law).
Source
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Optimal Alpha:
Beyond Portable Alpha
January 29, 2006
From SeekingAlpha:
As regular readers
may recall, Alpha Male was at a hedge fund conference last fall
involving a large number of institutional investors. While the
“main stream media” was not invited, AllAboutAlpha.com was able
to report on few general themes and some of the extra-curricular
events. One of the speakers was Robert Zink of behemoth money
manager Bridgewater Associates, managers of over $150 billion in
AUM (and pioneers of pioneers of alpha-centric investing). He
brought with him a very interesting message, but we ran out of
space and time to report on it back in October.
Thankfully, a loyal reader just passed along this article by
Zink’s boss Ray Dalio (CEO & founder of Bridgewater and
super-rich guy) and reminded us to post on these issues. In the
article, Dalio makes essentially the same arguments as Zink did
last fall - that any asset class can be leveraged or
de-leveraged to assume any level of risk. Dalio also claims that
alpha-centric investing will cause the lines between “hedge
funds”, “long-only equity” and all other asset classes will melt
away as all asset managers fight for “the whole enchilada“.
Source
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Most Hedge Strategies Rally, Short-Sellers Torched
December 18, 2006
From FINalternatives:
Hedge funds are
rallying at the end of the year, and though double-digit-returns
are in sight, alpha is going to be awfully elusive.
A quartet of hedge fund indices showed a strong November for
hedge funds, and a good one for investable hedge funds. The
Credit Suisse/Tremont Hedge Fund Index rose an estimated 2.07%
on the month (11.81% year-to-date) and the newly-rechristened
Greenwich Global Hedge Fund Index (the former Greenwich-Van)
returned 2.04% (10.54% YTD). Meanwhile, the RBC Hedge 250 Index,
an investable benchmark, was up 1.6% in November (9.10% YTD) and
the Credit Suisse/Tremont Investable Hedge Fund Index rose 1.3%
(7.84% YTD).
Source
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There's room
for more alpha: T. Rowe Price
September 15, 2006
From Financial Standard.com.au:
Despite making money
for investors the world over for nearly 70 years, US based T.
Rowe Price has avoided the Australian market, until now.
But with the red-hot global run that most Aussie equities
managers have ridden to record returns now cooling, and a
crowded landscape of boutique and big brand managers vying for
business, it might seem a strange time for T. Rowe Price to be
making an entry.
Source
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Alpha betting
September 14, 2006
From Economist.com:
IT HAS never been easier to pay less to invest. No fewer than
136 exchange-traded funds (ETFs) were launched in the first half
of 2006, more than in the whole of 2005.
For those who believe in efficient markets, this represents a
triumph. ETFs are quoted securities that track a particular
index, for a fee that is normally just a fraction of a
percentage point. They enable investors to assemble a low-cost
portfolio covering a wide range of assets from international
equities, through government and corporate bonds, to
commodities. Morgan Stanley estimates that ETFs control some
$487 billion of assets, up 16.7% from a year ago. It predicts
they will have $2 trillion of assets by 2011. No longer must
investors be at the mercy of error-prone and expensive fund
managers.
Source
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Alpha is Everything in Fund Management -- Or Is It?
September 6, 2006
From Seeking Alpha:
I find
it interesting how the gang on the tube talked incessantly
during the last two weeks of August about, "when the adults get
back yada yada." Volume does not seem crazy low, but we are as
flat as we have been for most of the last couple of weeks. The
notion that the adults were paying no attention when they were
away and were going to go hog wild when they came back made no
sense.
Source
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SERF
awards MLIM $85m portable alpha mandate
September 4, 2006
From Financial Standard.com.au:
The $1.5 billion
Stevedoring Employees Retirement Fund (SERF) has awarded Merrill
Lynch Investment Managers (MLIM) an $85 million institutional
mandate to invest in a portable alpha strategy with a twist.
Under the mandate, MLIM’s US based portable alpha team will
select a combination of managers handpicked from the group’s 120
internal investment teams to get the best alpha returns for
their clients.
Source
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Returns Get a New Lift
August 28, 2006
From Barron's Online:
HEDGE
FUNDS' GO-ANYWHERE INVESTMENT STRATEGIES have reshaped the
investing world, and now their opportunistic money managers are
preparing to go mainstream.
The catalyst? Hunger for returns is propelling pension funds,
endowments and other institutions toward "portable-alpha"
investment strategies at a faster pace with every month.
Source
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San Diego County hires BGI for 'alpha engine' investment
August 24, 2006
From Pensions&Investments Online:
San Diego County
Employees’ Retirement Association invested $50 million in the
Barclays Global Investors Multi-Strategy Fund as part of the
association’s $1.5 billion “alpha engine,” said David J.
Deutsch, CIO...
Source
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Resolution’s Alpha
male tops bill
August 21, 2006
From The Herald:
BARRY Norris, who
runs Resolution Asset Management's Argonaut European Alpha fund,
has jumped to top spot in The Herald's latest monthly table of
top-performing managers running money for Scottish investment
houses.
Norris took top position for the first time with a jump in his
UK-wide ranking from 22nd to 12th when investment performances
for the three years to July 31 were compiled by financial
publisher Citywire.
Source
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SSgA launches
neutral Asian alpha fund
August 21, 2006
From FinancialStandard.com.au:
State Street Global
Advisors (SSgA) has launched its new SSgA Asia Pacific Equity
Market Neutral Fund, aimed at giving institutional investors
easy access to pure alpha returns from Asian equity markets.
The strategy, designed by SSgA’s quantitative team in Australia,
together with the global Advanced Research Centre, will use a
similar investment process to SSgA’s Australian Long-Short Fund
and will employ a quantitative stock picking process.
Source
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Covering the spectrum
July 27, 2006
From MoneyManagement.com.au:
Researcher Lonsec
calls it the year of the multi-manager, and from some planner
and investor perspectives ‘manage the manager’ funds appeal as
the ultimate one-stop shop.
One of the major drivers for their popularity is that
multi-manager and multi-strategy products can and do offer a
diversification of style and manager with relatively low
volatility.
Source
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Mellon funds new portable alpha product
with $1 bln
July 25, 2006
From
Reuters:
Mellon
Capital Management Corp. (MEL.N: Quote, Profile, Research), a
unit of Mellon Financial, on Tuesday said investors have put up
$1 billion for its latest "portable alpha" program designed to
give investors better returns using hedge fund techniques.
San Francisco-based Mellon Capital, which has $148 billion in
assets under management, called the new program International
Equity Alpha Plus, its third portable alpha program launched
this year.
Source
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PennSERS OKs $2.15 billion in portable alpha investments
July 20, 2006
From
Pensions&Investments Online:
Pennsylvania State
Employees’ Retirement System, Harrisburg, approved portable
alpha investments totaling roughly $2.15 billion, confirmed
Robert Gentzel, spokesman. The $30 billion retirement system
will hire two hedge funds of funds
Source
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Iowa
Public Employees OKs portable alpha program
July 19, 2006
From
Pensions&Investments Online:
Iowa
Public Employees’ Retirement System officials approved a new
portable alpha program, said Jeffrey Beisner, senior investment
officer, public equities. Officials at the $20 billion, Des
Moines-based system will
Source
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Alpha, beta and commodities
June 25, 2006
From
Gulfnews.com:
Dubai: Understanding "fund-manager-speak" is like keeping up
with the changing dialogue of the modern teenager. What we sent
them to school to learn isn't always what comes out at the other
end.
Enter: "portable alpha", "exotic beta" and how to achieve it,
which, in one word from Daris Delins of Castlestone Management,
is "commodities". The A, B, C of what you need to know in order
to make more than the market is about to unfold.
Source
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Punters
should beware lure of Alpha yields
June 24, 2006
From
The Australian:
TREASURER Peter Costello got quite excited on Monday. Okay,
okay, he gets excited a lot - but it's what he was excited about
that we are interested in.
He was excited because the Australian Statistician put out
figures showing the local managed funds industry had cracked the
$1 trillion barrier for funds under management. This is big
bikkies, as Pete said.
Source
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In search
of alpha
June 8, 2006
From
Financial Mirror:
Attendees of the SFM Group International Investment Conference
for Institutional Investors at the Hilton Hotel were introduced
to a range of investment styles and strategies from leading
European investment managers last Thursday.
In an earlier exclusive interview with the Financial Mirror, one
of the event’s speakers, Dr Orun Palit, head of Equity at AIG
Global Investment Group (Switzerland), explained the investment
philosophy behind the AIG Equity Fund Europe.
Source
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Citigroup unit to start portable alpha hedge fund
June 7, 2006
From
Pensions & Investments Online:
Citigroup Alternative Investments created a formal portable
alpha investment center and will launch a Cayman Islands-based
multistrategy hedge fund in August, according to an internal
memo by Dean S. Barr...
Source
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Hundreds Of
Millions For Top Hedge Funders
May 29, 2006
From
ABC News:
Where is the money and power on Wall Street? A new survey
reports that it is firmly in the hands of those who run hedge
funds.
How about an annual payday of $1.5 billion? According to a
survey by Alpha, a magazine published by the highly watched
Institutional Investor, that's just what James Simons, founder
of Renaissance Technologies, made in 2005. His flagship
Medallion Fund, with $5.3 billion invested, returned 29.5
percent, net of fees.
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Hedge-fund manager pockets a cool $1.5 billion
May 28, 2006
From
The Philadelphia Inquirer:
James Simons earned an estimated $1.5 billion last year, the
most of any hedge-fund manager, followed by Boone Pickens at
$1.4 billion, according to Institutional Investor's Alpha
magazine.
The average pay of the top 26 earners rose 45 percent in 2005 to
$363 million, the magazine said. Hedge funds returned 9.2
percent last year, double the Standard & Poor's 500 index and
about the same as in 2004, according to Chicago-based Hedge Fund
Research.
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SSgA steps up
international campaign
May 17, 2006
From
Global Investor:
SSgA
is planning to launch a range of pure alpha products later this
year to tap into demand for absolute return, which shows no sign
of slackening off. But Lazberger remained tight-lipped on plans
for the European ETF business, which is relatively small at
about $2 billion. In recent years BGI has pulled ahead of SSgA
with its iShares offering, but Lazberger warned: "We do want to
be a serious player in the European ETF space. The race is on
but it is not yet won."
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The Hybrid
Hype
May 1, 2006
From
On Wall Street:
After
weathering the recent storm of a bear market, institutional
clients at UBS came knocking on the firm's door with one demand:
They needed less exposure to the ups and downs of the equity
market as they continued to support their obligations. Payouts
had to carry on, but there had to be growth to meet the next
generation of retirees.
So UBS got to thinking. If this is affecting pension markets,
individual investors had to be anxious, too.
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Next up for
advisers is porting alpha
May 1, 2006
From
InvestmentNews.com:
The
concept of portable alpha has been a hot topic in the
institutional world for about the past three years, and now it
is seeping into the individual-investment world.
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Investors
Pushing HFs Against The Grain
April 12, 2006
From
Institutional Investor:
After
all the criticism that hedge funds are abandoning traditional HF
approaches, industry players are saying it's the investors who
are pressing them to measure performance against benchmarks
rather than focus on alpha. "Hedge funds hate benchmarks,"
declared Nicholas Roe of Citigroup at the Reuters Hedge Funds
and Private Equity Summit, but, he adds "investors' habit is to
push towards relative performance. Unfortunately, it's the way
of the world; people love to have something to compare
performance with." The source of that pressure appears to be
mainly pension funds, whose "natural tendency is to think about
benchmarks," Nils Tuchschmid of Credit Suisse told the
conference.
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Hedge
funds shifting to benchmark performance
April 6, 2006
From
Reuters Italia:
Investors are pushing hedge funds towards the use of relative
rather than absolute measures of performance, which could create
pressure on fees, hedge fund industry figures said.
Hedge funds, which can use tools such as derivatives and
short-selling to help protect assets and make money when markets
are falling, have tended to measure their performance in
absolute or real returns.
In contrast, traditional fund managers tend to measure
performance against benchmarks and against rival funds, though
some are beginning to adopt absolute measures of performance.
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Inflows not
weakening hedge fund returns
April 5, 2006
From
Reuters Italia:
Hedge
fund returns have hit speed-bumps in recent years, but the
sector cannot blame a mass inflow of money from institutions for
causing weak performance, a senior HSBC executive said on
Wednesday.
Hedge funds, which have assets estimated between $1 trillion and
$1.5 trillion, have returned less than the stock markets in
recent years.
Some commentators say big inflows from institutions into hedge
funds are crowding the market, but that is unlikely to be the
main force at work, Bill Maldonado, chief executive officer,
alternative investments, HSBC Halbis Partners (UK), told the
Reuters Hedge Funds and Private Equity Summit.
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Hedge
funds swap some liquidity to boost returns
April 4, 2006
From
Reuters Italia:
Hedge funds are increasingly turning to alternative assets to
boost returns, though such investments are often less liquid
than traditional financial instruments, said Nils Tuchschmid,
global head of portfolio management at Credit Suisse.
Speaking at the Reuters Hedge Fund and Private Equity Summit,
Tuchschmid said: "Some of the new strategies are slightly less
liquid. This is the price you have to pay to get exposure."
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Betting on the alpha
and the beta
February 19, 2006
From
The Kansas City Star:
There is — apologies
for the pun — a beta way to invest.
If you’re like many mutual fund investors, you own a mix of
actively managed stock funds that tap into a host of market
sectors, such as large companies, small stocks and foreign
shares. And you are hoping to beat the market.
Problem is, a lot of what you’re paying for isn’t stock-picking
skill, but basic market exposure — and you could get that a
whole lot cheaper by buying market-tracking index funds.
Indeed, institutional investors have woken up to this fact. It
explains their enthusiasm for not only prosaic index funds, but
also exotic investments like hedge funds and venture capital,
where returns depend less on the market and much more on the
investment manager’s skill.
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Absolute Alpha
launches new FOHF
February 17, 2006
From
Financial Standard:
Absolute Alpha,
backed by Astarra Capital Limited, was launched as a hedge fund
of funds last night in a bid to offer equity-style returns but
with less market volatility.
Absolute Alpha’s CEO, Shawn Richard, former director and owner
of Astarra, said he believes their derivatives experience and
the cautious approach to selecting fund managers will be their
strength.
Richard however was tight lipped about who any of the six
managers they are using would be.
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The alpha
in an event
February 9, 2006
From HedgeCo.Net:
In the hedge fund
arena, one quality that managers highlight is their ability to
generate alpha. Alpha can be described as the return a manager
is able to generate by putting together a portfolio of
securities that will outperform the market within a specified
time frame. He or she is able to do this by ensuring that this
portfolio has little correlation with the overall market.
Generating incremental returns above the market while hedging
the market exposure, known as beta, is a delicate balancing act
that a manager has to carry out. This is even more difficult for
managers who employ the event driven strategy.
Event driven hedge fund managers have found that, to deliver
positive alpha to their clients, they have to be ready to change
their approach to suit the circumstances (this could be the deal
or the market), and they need to take fewer positions, control
the liquidity of their fund, and, more importantly, play an
activist role.
An event may be the issuing of a press release by a company, a
company making an earnings announcement, or a political or
general world event. Traditionally, event driven hedge fund
managers are those who take significant positions in a certain
number of companies with ‘special situations’. This could mean
companies with distressed stock prices, mergers, takeovers,
share buy-backs or capital returns. The objective of the manager
is to analyse the effect the corporate action would have on
security prices, instead of focusing on the company’s earnings
and dividend streams. The hedge fund would normally take a long
position on the company being acquired and a short position on
the acquirer. Owing to the position they have taken, they are
not as sensitive to market movements. They tend to consistently
generate high risk-adjusted returns that have little correlation
with the market.
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Alpha Goes Beta
February 3, 2006
From
InstitutionalInvestor.com:
Alternative
Investment Partners has filed a prospectus with the Securities
and Exchange Commission to spin-off a fund from its Alpha Hedged
Strategies Fund called the Beta Hedged Strategies Fund. The
target launch date is Mar. 31.
Lee Schultheis, chief investment strategist and co-founder of
AIP, says the team is in the process of converting the Alpha
fund into two mini-funds. The funds will be packaged as two
independent investment vehicles, but they will share some of the
same underlying managers. The Alpha fund currently has 50
managers; the Beta fund will start out with 10 managers,
including five with long-short equity strategies, one with
distressed securities, an event driven manager and one handling
merger arbitrage, among others.
Schultheis hopes to grow the fund to 40 or 50 managers to "get
really broad diversification." Schulteis expects the fund will
have 15 to 20 managers by this time next year, adding "the
diversification shareholders will get [with the fund] will be on
par with a hedge fund of funds."
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Blogger Aids Investors Seeking Alpha
January 27, 2006
From
InstitutionalInvestor.com:
Like
many users of the internet, David Jackson suddenly has an awful
epiphany: most of the Web's content is garbage.
The former Morgan Stanley telecom analyst blames bloggers. "Blog
software basically makes Web publishing free, and that means you
have millions of people who are now publishing stuff, 99.9% of
which is crap, 0.1% of which is really good," he says.
Fortunately for investors, most of the tens of millions of blogs
deal with relative trivialities, including the daily bloviations
of the e-hoi polloi, inside-the-Beltway petty politics and
various sporting disasters. Of course, many other blogs – and
other forms of e-communication – deal in opinion, rumor and
speculation regarding that most important of things to the
investor: publicly-traded companies.
Of
course, blogs offer a tremendous opportunity, as well; one that
Jackson hopes to exploit with Seeking Alpha.
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Hedge funds reduce portfolio risk - Edhec
January 17, 2006
From
IPE.com:
Using hedge funds
can halve the probability of extreme loss in a portfolio,
according to a new study from Edhec Risk and Asset Management
Research Centre.
Rather than
consider hedge funds as a separate asset class, the study – The
Benefits of Hedge Funds in Asset Liability Management -- says
they should be treated as a complementary management style to
asset classes such as equities and bonds.
“In the past, hedge
funds have been considered to give alpha benefits for asset
managers,” says Peter O’Kelly, marketing manager, Edhec Risk and
Asset Management Research Centre. “But their main benefit is to
reduce risk by diversification, particularly since they are not
correlated with other asset classes. So rather than look for
absolute returns from hedge funds, managers should be thinking
in terms of using them to diversify the portfolio and reduce
volatility.”
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Wall
Street's alpha female wants to smash glass ceiling
January 15, 2006
From
The Observer:
Suzanne Nora Johnson is a rarity: a woman who has made it to the
top in the world of investment banking. Not any bank, mind, but
the awesome moneymaking machine that is Goldman Sachs, the elite
Wall Street firm that last year made more cash out of advising
on mergers and acquisitions than any of its rivals.
Every morning, Johnson is in Goldmans' New York office before
seven, after a short drive from her Manhattan home. Wall Street
is a demanding and fiercely competitive place with long hours,
interminable meetings and office politics not for the
fainthearted.
But
Johnson seems relaxed in her plush office overlooking the city
as she sips from a glass of sparkling mineral water, scans her
email and fields the occasional phone call. 'You know, I love
this job, but you have to be committed, very, very committed.'
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Fiduciary Publication Explores Strategies to Improve Returns and
Portfolio Efficiency in Low-Return Markets
January 10, 2006
From
PR Web:
As part of its
ongoing efforts to help the institutional investment community
stay well-informed on investment and governance topics that
impact their roles as institutional investors and fiduciaries,
Strategic Investment Group has prepared an informative release
titled “Why Future Investment Returns Will Be Lower.” This
release is part of Strategic’s Fiduciary Insights, a series of
periodic publications dedicated to supporting those who share
fiduciary responsibility.
“We firmly believe that investors need to think seriously about
changing the way they evaluate and implement investment
strategies if they are to achieve their objectives in this new
environment,” says Hilda Ochoa-Brillembourg, Founder, President
and CEO of Strategic Investment Group, who previously led the
pension investment team of the World Bank. “One potential
solution is the use of advanced tools such as portable alpha
strategies to help survive the lean years ahead.”
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This year just like last - if only
January 10, 2006
From
The Sydney Morning Herald:
EXPECTATIONS for
returns in global equity markets are nearly unchanged from a
year ago - even though shares did much better than expected in
the intervening 12 months, and could do so again this year.
The 2006
instalment of Mercer Investment Consulting's annual Fearless
Forecast, to which investment managers from 157 firms worldwide
contribute their opinions, predicts global equity markets will
return 7.6 per cent this year.
Mercer's 2005
survey predicted global markets would return 7.7 per cent for
the year but Morgan Stanley Capital International's World index
returned 9.5 per cent. Annualised over the past three years, the
index has returned 19.3 per cent a year.
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Life
Settlement Solutions Inc.'s CEO to Present at GAIM USA 2006
Conference
January 9, 2006
From
TMC Net:
Many investors might
not know life settlements are an investment vehicle for hedge
funds, but at the GAIM USA 2006 conference, Larry Simon, founder
of Life Settlement Solutions, Inc., will share his insights on
the subject.
Simon is
director, president and CEO of Life Settlement Solutions, Inc.,
one of the nation's premier sources of life-settlement funding.
He is the originator of institutional funding in the life
settlement industry, and will present on the first day of the
Jan. 23-25 conference on the life-settlements market and
advantages and risks to the hedge fund investor. Simon will
speak under the seminar track, "Sources of Non-Correlated
Alpha," beginning at 2 p.m.
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Hedge
Funds may enter into insurance underwriting
July 28, 2005
From
HedgeCo.Net:
Hedge funds are increasingly drawn into insurance underwriting
business in an ever-ending search for alpha for their investors.
New reports show that many hedge fund managers have been active
in purchasing “catastrophe bonds” through such transactions
money is provided to insurers as well as reinsurers when
catastrophic events such as hurricanes and earthquakes occur.
Insurance firms purchase reinsurance policies so as to spread
the risks, which may arise from their insurance policies
purchased by individuals and companies. According to the report,
increasing numbers of hedge funds are participating in
reinsuring companies such as, “Glacier Reinsurance AG of Schwyz,
Switzerland; Bermuda-based CIG Reinsurance Ltd.; and Ritchie
Risk-Linked Strategies Ltd., also of Bermuda.”
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UBS
ranked best Asian Research provider for Hedge Funds
July 27, 2005
From
HedgeCo.Net:
Alpha Magazine has ranked UBS as the leading brokerage firm that
provides the best Asian equity research to hedge funds. The
Alpha survey included funds with an aggregate gross exposure to
Asian equities of about $55 million. The study reticulated the
responses of hedge fund managers, on the question of which
brokerage firms do hedge funds believe provide the best Asian
equity research. According to the findings, UBS received the
highest number of votes for the team position, having won in 17
of the 29 different categories in the All-Asian Research Team
arena.
Hedge funds that participated in the survey commented on the
qualities of services which brokerage firms provide to hedge
funds; thoughtful analysis, stock selection and number-crunching
capabilities are among some of the most important. Paul Bernard,
co-head of Asian research at Goldman in Hong Kong said, "It's
been our experience that long-only as well as hedge fund clients
look for the same thing - strong fundamental research delivered
succinctly."
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See also:
Alpha Related Books,
Alpha Related Scholarly
Papers,
or
Alpha Home Page. |
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| HEDGE FUND RISK AND OTHER
DISCLOSURES |
Hedge funds, including fund of funds (“Hedge
Funds”), are unregistered private investment partnerships, funds or
pools that may invest and trade in many different markets,
strategies and instruments (including securities, non-securities and
derivatives) and are NOT subject to the same regulatory requirements
as mutual funds, including mutual fund requirements to provide
certain periodic and standardized pricing and valuation information
to investors. There are substantial risks in investing in Hedge
Funds. Persons interested in investing in Hedge Funds should
carefully note the following:
- Hedge Funds represent speculative investments and involve a
high degree of risk. An investor could lose all or a substantial
portion of his/her investment. Investors must have the financial
ability, sophistication/experience and willingness to bear the
risks of an investment in a Hedge Fund.
- An investment in a Hedge Fund should be discretionary capital
set aside strictly for speculative purposes.
- An investment in a Hedge Fund is not suitable or desirable for
all investors. Only qualified eligible investors may invest in
Hedge Funds.
- Hedge Fund offering documents are not reviewed or approved by
federal or state regulators
- Hedge Funds may be leveraged (including highly leveraged) and
a Hedge Fund’s performance may be volatile
- An investment in a Hedge Fund may be illiquid and there may be
significant restrictions on transferring interests in a Hedge
Fund. There is no secondary market for an investor’s investment in
a Hedge Fund and none is expected to develop.
- A Hedge Fund may have little or no operating history or
performance and may use hypothetical or pro forma performance
which may not reflect actual trading done by the manager or
advisor and should be reviewed carefully. Investors should not
place undue reliance on hypothetical or pro forma performance.
- A Hedge Fund’s manager or advisor has total trading authority
over the Hedge Fund.
- A Hedge Fund may use a single advisor or employ a single
strategy, which could mean a lack of diversification and higher
risk.
- A Hedge Fund (for example, a fund of funds) and its managers
or advisors may rely on the trading expertise and experience of
third-party managers or advisors, the identity of which may not be
disclosed to investors
- A Hedge Fund may involve a complex tax structure, which should
be reviewed carefully.
- A Hedge Fund may involve structures or strategies that may
cause delays in important tax information being sent to investors.
- A Hedge Fund may provide no transparency regarding its
underlying investments (including sub-funds in a fund of funds
structure) to investors. If this is the case, there will be no way
for an investor to monitor the specific investments made by the
Hedge Fund or, in a fund of funds structure, to know whether the
sub-fund investments are consistent with the Hedge Fund’s
investment strategy or risk levels.
- A Hedge Fund may execute a substantial portion of trades on
foreign exchanges or over-the-counter markets, which could mean
higher risk.
- A Hedge Fund’s fees and expenses-which may be substantial
regardless of any positive return- will offset the Hedge Fund’s
trading profits. In a fund of funds or similar structure, fees are
generally charged at the fund as well as the sub-fund levels;
therefore fees charged investors will be higher that those charged
if the investor invested directly in the sub-fund(s).
- Hedge Funds are not required to provide periodic pricing or
valuation information to investors.
- Hedge Funds and their managers/advisors may be subject to
various conflicts of interest.
The above general
summary is not a complete list of the risks and other important
disclosures involved in investing in Hedge Funds and, with respect
to any particular Hedge Fund, is subject to the more complete and
specific disclosures contained in such Hedge Fund’s respective
offering documents. Before making any investment, an investor should
thoroughly review a Hedge Fund’s offering documents with the
investor’s financial, legal and tax advisor to determine whether an
investment in the Hedge Fund is suitable for the investor in light
of the investor’s investment objectives, financial circumstances and
tax situation.
All performance information is believed
to be net of applicable fees unless otherwise specifically noted. No
representation is made that any fund will or is likely to achieve
its objectives or that any investor will or is likely to achieve
results comparable to those shown or will make any profit at all or
will be able to avoid incurring substantial losses. Past performance
is not necessarily indicative, and is no guarantee, of future
results.
The information on the Site is intended for
informational, educational and research purposes only. Nothing on
this Site is intended to be, nor should it be construed or used as,
financial, legal, tax or investment advice, be an opinion of the
appropriateness or suitability of an investment, or intended to be
an offer, or the solicitation of any offer, to buy or sell any
security or an endorsement or inducement to invest with any fund or
fund manager. No such offer or solicitation may be made prior to the
delivery of appropriate offering documents to qualified investors.
Before making any investment, you should thoroughly review the
particular fund’s confidential offering documents with your
financial, legal and tax advisor and conduct such due diligence as
you (and they) deem appropriate. We do not provide investment advice
and no information or material on the Site is to be relied upon for
the purpose of making investment or other decisions. Accordingly, we
assume no responsibility or liability for a ny investment decisions
or advice, treatment, or services rendered by any investor or any
person or entity mentioned, featured on or linked to the Site.
The information on this Site is as of the date(s) indicated,
is not a complete description of any fund, and is subject to the
more complete disclosures and terms and conditions contained in a
particular fund's offering documents, which may be obtained directly
from the fund. Certain of the information, including investment
returns, valuations, fund targets and strategies, has been supplied
by the funds or their agents, and other third parties, and although
believed to be reliable, has not been independently verified and its
completeness and accuracy cannot be guaranteed. No warranty, express
or implied, representation or guarantee is made as to the accuracy,
validity, timeliness, completeness or suitability of this
information.
Any indices and other financial benchmarks
shown are provided for illustrative purposes only, are unmanaged,
reflect reinvestment of income and dividends and do not reflect the
impact of advisory fees. Investors cannot invest directly in an
index. Comparisons to indexes have limitations because indexes have
volatility and other material characteristics that may differ from a
particular hedge fund. For example, a hedge fund may typically hold
substantially fewer securities than are contained in an index.
Indices also may contain securities or types of securities that are
not comparable to those traded by a hedge fund. Therefore, a hedge
fund’s performance may differ substantially from the performance of
an index. Because of these differences, indexes should not be relied
upon as an accurate measure of comparison.
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