Q&A with Christian Szylar, Global Head of Risk and Performance Measurement at Marshall Wace LLP

GAIM Ops International speaker Christian Szylar, Global Head of Risk and Performance Measurement at Marshall Wace LLP, to discuss how risk management activities for alternative asset managers have changed since the 2008-2009 financial crises. What kinds of questions do your investors ask you most often? I assume that your question refers to questions I’m asked in my capacity of managing the risk department. Investors mainly during the due diligence process want first to make sure about proper risk governance in the firm, and have a sense of comfort that proper risk management systems are in place to understand what the main risk drivers are for any portfolio. They are particularly interested in the changes we have implemented in the way we monitor risk since the financial crisis, and how...

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So You Want to be a Mutual Fund Manager

By: Stephen H. Bier, Aisha Hunt, and Jonathan R. Massey, Dechert LLP*   So you are an investment adviser registered with the Securities and Exchange Commission (“SEC”) under the Investment Advisers Act of 1940, as amended (“Advisers Act”). You currently manage separate accounts and, perhaps, one or more private funds, but you are interested in getting into the registered fund business. As an SEC registered adviser, you have already adopted compliance policies and procedures pursuant to Rule 206(4)-7 of the Advisers Act and you are certainly eligible to advise a registered investment company.1 So you’re good to go? . . . Not so fast. To read the rest of this article visit the Alternative Strategy Mutual Funds Forum event website....

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What TESLA’s Recent Success Means for America’s Manufacturing Comeback

With much fanfare, Tesla just announced its first quarterly profit: $11.2 million.  Why is this so significant?  Well, some core tenants of Tesla’s manufacturing process are gaining traction among manufacturers globally as they assess new opportunities in the U.S. A lot has been written lately about America’s comeback as a manufacturing powerhouse.  While the degree to which this country will see a resurgence in manufacturing jobs is open for debate, one thing is for certain – cost efficiencies from natural gas exploration, increased labor costs abroad and new innovation in the US with regards to automation, 3D printing and many other technologies have all converged to fuel the perfect storm of opportunity.   But the how,...

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6 Ways Hedge Funds Need to Adapt Now

The Sixth Annual Global Survey of Institutional Hedge Fund Investors + Insights from Industry Roundtables The hedge fund industry is here to stay. Yet, the industry’s value proposition is being seriously questioned, and institutions continue to escalate their demands for transparency and intensify their due-diligence processes.  Some see the institutionalization of hedge funds as a double-edged trend that may hinder performance even as it brings more discipline and accountability to the industry.  No longer can managers simply “show and tell.”  Now investors want proof and need to judge for themselves. To explore what directions the industry is taking now, and how hedge fund firms can better equip themselves to succeed, SEI...

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Could a Virtual Currency be the Next ETF?

You may have heard a lot about Bitcoin in the past week. For one, the worth of the digital currency has skyrocketed, with values topping $250 today, up from $44 a month ago – and $4.93 a year ago. The staggering run-up has got the InAlternatives team excited – but there’s also talk of a potential bubble in the making, particularly in the wake of a “flash crash” last month that was eventually traced to a technological glitch in the Bitcoin exchange. Of course, the mishap didn’t temper the appetite for the virtual currency, which is traded on a peer-to-peer network outside the control of central banks. This recent VF.com story on Bitcoin reiterates the old adage, the bigger the risk, the more lucrative the reward. Despite its rock-n-roll beginnings,...

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And the hits just keep on coming…

It is clear from all the news these last few weeks that insider trading indictments are not going away. The SEC has clearly targeted any and all who are suspected of doing this dirty deed. And if insider trading indictments aren’t bad enough, it seems now the press is focused on how hedge fund managers are spending their market winnings.  Just as we all were settling to read about the recent indictments of SAC Capital Advisors LP personnel as well as additional indictments in the Galleon Group case, we got wind of a recent spending spree by SAC founder Steve Cohen. His purchase of a home in the Hamptons and Picasso’s “Le Rêve”  have made substantial headlines around world. For news junkies, these are the stories that keep on going. It...

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Preparing for Generation D

They are 75 million strong.  They hold nearly $27 trillion in assets.  When it comes to investing, they are active, with higher levels of income.  And they’re usually well-educated.  Accenture calls them “Generation D,” because what sets this group apart is their “deeply digital lifestyle.”Theirs is a demographic based on behavior, not by age.  Accenture stumbled upon Generation D last summer while conducting a survey of current and future investors.  The group is a hybrid, made up of “Skeptical Millennials,” “Jaded Gen-Xers,” and “Trusting Boomers.”  The common thread is that “Gen D members typically use multiple devices in a given week to manage financial accounts, look up investment information, and pay...

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Is Regulation Keeping You Up At Night?

News outlets have been filled with articles on the settlement that hedge fund legend Steve Cohen recently reached with the SEC. The settlement which has been called historic by the likes of USA Today is just another example of the regulators push to go after “the bad guys” in wake of the Madoff fraud back in 2008. Has Wall Street or better yet the hedge fund industry fallen off a cliff or is this just another example of things to come in this area of the capital markets? It is clear that going after bad guys is something the SEC is focused on. There has not been a lack of headlines about funds that have done wrong by the markets. Be that as it may, the irony is that the media never tries to find the “inside information” of what Hedge Funds...

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Is now the time to invest in Africa?

Africa seems to be the new darling of the emerging market managers who are looking for higher returns for their investment portfolio. The demographics sound impressive: Africa's population has rapidly increased over the last 40 years, and consequently, it is relatively young. In some African states, half or more of the population is under 25 years of age. According to McKinsey & Associates, household consumption in Africa is now higher than India or Russia and is expected to continue to grow. Africa is vast- 54 countries and 29 stock exchanges and different regions present different opportunities. Original Photo: www.freeworldmaps.net  European investors have been investing in Africa with much success over the last decade...

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What Will Distinguish Top Asset Managers in 2013? Innovation, Researchers Say

As defined contribution plans continue “the quest for new innovative products” in the alternatives space, money managers are going to have to notch up their product creativity.  Pension plan managers are looking for managers with unbundled fund options and customized target-date funds that offer multiple manager inputs. This search trend has created some challenges for large money managers as their smaller competitors have been able to adapt quickly to the needs of the DC plan market. Pension Plans are also seeking more options in real assets, real estate, and private equity, and customized target-date funds provided by nimble small managers are allowing plans the flexibility they need for these allocations. This is good news for smaller...

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Which Crop is the Next to Pop?

Agriculture can be contradictory asset class, with investors often viewing the opportunities as both over-heated and under-invested. But throughout our research with investors and managers alike, all signs points to permanent crops as the next segment to pop.  Many investors lump long-time favorite timber into the permanent crop category – and there are some relative newcomers like palm oil and perennial energy crops that are also getting attention. But more frequently, we’re hearing that the more niche permanent crops are the ones to watch. Investors love these “boutique” items, such as avocados, almonds and pistachios because they, often command higher prices resulting in higher margins. There’s even a shift within individual commodities...

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The State of the Union… Now what?

Last night the President gave his annual State of the Union address laying out his plans for the economic future of the United States of America.  The main idea was more jobs. However you personally felt about the speech, we thought you would enjoy hearing what both sides of the aisle thought about Mr. Obama’s State of the Union. Below are links to some commentary on the speech for you to enjoy. Chicago Tribune: State of the Union: Obama to GOP: Can we just move on?The Washington Post: President Obama’s 2013 State of the Union by the numbers USA Today:  Readers describe state of the union in a word: 'Screwed'Forbes: 2013 State of the Union Recap The IIR Alternatives Team is currently gearing up for GAIM Ops Cayman and our Investor...

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The Changing Face of the SEC

As Mary Jo White assumes the helm at the Securities and Exchange Commission, speculation as to whether anything or everything will change continues to fuel the regulatory flames.    Ben Protess and Benjamin Weiser of DealBook said that the appointment, in conjunction with other new nominations, demonstrated the President’s “resolve to hold Wall Street accountable for wrongdoing, extolling his candidates’ records as prosecutors.”    As noted in the WSJ, the nomination of Mary Jo White marks the first time a former prosecutor has been chosen to lead the Securities and Exchange Commission.   But, one must ask, is White’s prosecutorial background a preposterously delayed reaction to egregious infractions...

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Hedge Funds Play Catch-Up

Our annual GAIM conference last week in Boca Raton yielded a wealth of investment insights and industry information for our attendees.  But if we had to pick one macro trend for the coming year, none may be more important than this one: more and more managers are favoring equities – in particular, U.S. equities – over fixed-income.  That’s a new twist in the world of hedge funds.  Earlier this month, Hedge Fund Research announced that the fixed income-based “Relative Value Arbitrage” strategy at the end of last year overtook “Equity Hedge” as the largest strategy area by assets.  But it may be no coincidence that, while hedge funds’ love affair with all things debt-related was peaking, the S&P 500 Index was beginning...

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