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.