Alpha Mail - A monthly email update from AllAboutAlpha.com
Dear Alpha Mail Subscriber:
 
With many hedge fund indices up nearly 10% over the past 2 months and the Wall Street Journal declaring that hedge funds are "beginning to heal", things are looking up for the industry.  Reports this week also suggest redemptions - which have obviously been mitigated by recent returns - may have finally ended.
Our most popular posts over the past month have followed suit - including stories about an old favorite, portable alpha, being "reborn".
Also returning to the news last month was alternative beta (a.k.a. hedge fund replication).  We examined one such model that actually exceeded the performance of the hedge fund industry and we reviewed a new paper by MIT's Andrew Lo arguing that alternative beta models can also be used to escape the economic exposure resulting from being stuck in a gated fund.
Stories about the convergence between hedge funds and mutual funds show that both camps are beginning to pursue an "if you can't beat 'em, join 'em" strategy.
And finally, negative coverage of short extension strategies and the so-called illiquidity premium show that not everything is coming up roses this spring.
But suffice it to say, there is finally more good news to report than bad in the hedge fund sector as its participants try to forge a more stable and healthy alpha-centric investment industry.
Last Month's Most Popular Posts 
  1. Portable Alpha to be "reborn" according to author of new paper on the topic:  Is Portable Alpha being reincarnated as a strategy everyone actually understands?
  2. With hedge funds back in the black, how are the hedge fund "clones" doing?:  Here's one case where a sequel may be better than the original movie.
  3. 130/30 once had "cool factor" now has fleas:  Has 130/30 really gone to the dogs?
  4. 2008 - The year of the small fund anomaly:  Like small stocks, small hedge funds have traditionally had a higher standard deviation and return than large funds.  But not last year...
  5. Columnist argues hedge funds should be "regulated out of existence" - Time for a reality check:  Hedge Funds aren't perfect.  But the anti-hedge fund crowd desperately needs to move beyond the same tired rhetoric.
  6. Putnam's new crossover hits showrooms: Mutual fund pioneer Putnam Investments is taking a page from the automotive industry by launching what amounts to a hedge fund / mutual fund "cross-over".
  7. "Illiquidity Premium" that fuelled endowment returns falls back to 2005 levels: Guest contributor Michael Crook, CAIA, finds that a key measure of (il)liquidity may help explain the recent performance of university endowments.  Too bad that measure has recently fallen back to Earth.
  8. "Beta blockers" aim to reduce the blood pressure of those facing hedge fund gates:  AllAboutAlpha.com favorite Professor Andrew Lo of MIT says that alternative beta represents an escape route for gated investors.
  9. Placement Agent Man: "There's a man who leads a life of danger.  To everyone he meets he stays a stranger.  With every move he makes another chance he takes.  Odds are he won't live to see tomorrow...."
  10. The new look for hedge funds this summer - mutual funds:  Putnam isn't the only one who is proving "convergence" is alive and well.

We're off to the Managed Funds Association's Forum 2009 in Chicago next week and then I'm heading to Toronto to moderate an AIMA panel on hedge fund due diligence.  Both of these organizations (the MFA and AIMA) have really ramped up their tandem advocacy efforts recently as regulators take a keen interest in the eventual form of "Hedge Fund Industry 2.0".  
 
Our next Alpha Mail will be sent in the first week of August.  So until then, have a great summer.  
 
Happy Alpha Hunting,
 
Christopher Holt, Managing Editor
AllAboutAlpha.com
[email protected]
 


Wednesday, June 17, 2009
Alpha Mail - A monthly email update from AllAboutAlpha.com

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