What Does Alex Rodriguez Have to do with IIR USA?

Commitments, contracts, guarantees, if only the Yankees had an extra $240 Million, who knows, maybe Albert Pujols would be wearing pinstripes right now. The Yankees superstar 3^rd baseman Alex Rodriguez went 3 for 25 at .120 in the post season this year. If this wasn’t bad enough since joining the Bronx Bombers, Rodriguez  has just one World Series win in pinstripes.  His most recent deal signed back in 2007 was for $275 million over 10 years according to ESPN.  After this year, the front office needs to be thinking about its R.O.I.

Alex Rodriguez #13 of the New York Yankees. (Image: Getty Images via @daylife)

How does the richest Major League Baseball team relieve itself from this burden? The answer is simple look to the secondary market.  One thing we know, that there is always a buyer and a seller – it comes down to price.  The Yankees made an investment in Rodriguez and while they may have received some return, perhaps it is time to head for the exit. 

Looking to the secondary market for relief is something that many investors do on a regular basis. Investors privately seek out their peers to take over their commitments in funds and relieve them of the “burdens” on their portfolios. Exiting the fund or perhaps in this case making a trade allows the capital to be deployed to better investment opportunities.

Views from the desk of the IIR production staff: The secondaries market will continue to grow throughout 2013. And as for the Yanks, number 28 coming in 2013.

Whatever the future may hold for Alex Rodriquez, one thing is for sure, Market Leaders in Secondaries, taking place December 4^th in NYC is going to be a homerun!  

Read more »

Innovations in Ag are Making Headlines

Earlier this week the Wall Street Journal had a special report on innovations in agriculture. The report outlined a series of fascinating advances in agriculture technology, farming, irrigation and biotechnology – some of the very topics, we've been researching here at the Institute for International Research.

Water Scarcity (Photo: Alejandro Peters)

With the risk of food and resource scarcity ever-looming, many entrepreneurs and multinationals are innovating to solve food-related issues, running the gamut from solving water scarcity to improving the taste of a tomato.

Scarcity can often lead to invention and innovation, and agriculture is no exception.

At IIR’s AgReturn Global Investments conference next month, you’ll be able to take it a step further by getting on-the-ground insight into investing in agriculture innovations, what links in the food chain are ripe for opportunity and how to best diversify your portfolio – without worrying if agriculture is the next cleantech.

The Journal report details how environmental issues like the recent drought are impacting farmers – and at events like Agreturn, you’ll be able to dive into how that impacts your portfolio or your targeted investments in farmland with experts on the ground.

Read more »

Size Does Matter…

It turns out that when looking at funds over the long term, it may make sense to go bigger. It seems that smaller funds just aren't able to put up the numbers when compared to their larger peers according to study of small, medium and large funds.

The study by fund analytics firm, Pertrac, suggests that larger funds perform better than smaller funds in down markets.

The study, which is in its sixth year, took a look at performance trends of funds of all shapes, sizes and strategies during the period stretching back from 1996 to 2011.

On average, the study found that the “average large” fund outperformed the “average small fund”.

The study used fifteen hedge fund databases that took into account funds that have gone out of business during the period.

Pertrac said the study defined small funds as those with assets under management of less than $100 million,mid-size funds as those with assets of between $100 and $500 million and large as those having assets north of $500 million. To learn more about the study, click here.

Read more »

Investors Seeking Aggressive Hedge Fund Managers With Exotic Strategies

Structured credit strategies continue to beckon investors all over the globe according to a recent research report from Deutsche Bank.  Investors, it seems, like the return streams these folks are providing. According to London-based research outfit Hedge Fund Intelligence, funds employing credit strategies recorded a median return of 7.54 percent, more than double the return for all funds combined that are tracked by the company.

With investors earning a pittance on yields in the Treasury market, it’s no wonder they are seeking out savvy fund managers who are getting aggressive with more exotic credit strategies.  

The Deutsche Bank report, click here to read, recounts a recent visit to several Midwestern fund managers who discussed their best ideas.  More than a few mentioned structured credit instruments.

One manager recently told Reuters, ‘If you're willing to go out more into more illiquid, structured or complex trades, there's more opportunity, and potentially mid-teen returns’. Read the story here.

Photo: s_falkow

So how far are these managers going out on the risk scale? 

Many are betting on collateralized loan obligations (CLOs), bank loans, and even some mortgage-backed securities that have been out of favor since the financial crisis hit.

Some say, that this time it’s different – both Deutsche Bank and Reuters point out that, unlike before the financial crisis, funds for the most part are not boosting returns with borrowed money.

The jury is still out. Stay tuned.

Read more »