Alpha Mail - A monthly email update from AllAboutAlpha.com
Dear Alpha Mail Subscriber:
 
You know that feeling you get on a roller coaster as you accelerate down the first hill?  When your stomach feels like it's in your throat and the people around you start to scream and throw their arms in the air?  Well, many would agree that was the feeling we all had last fall.
 
But the energy created as a roller coaster hurtles down the track needs to go somewhere.  In the back of your mind, you know that the faster you go down, the faster you'll come back up after the next turn.
 
That turn was called "Spring 2009" and the energy created on the downhill run has apparently propelled the industry almost all the way back up the next hill.  The HFRI, for example, is now within spitting distance of its all-time high.  And according to data from HFN, August saw net new inflows of $20 billion.
 
Like the "Mega Beast," "Sky Smasher" and "Vomit Comet," the hedge fund industry may someday go down another hill.  But its participants might take solace in the fact that once again, the biggest climbs have occurred after the biggest drops.
 
Last month, we covered a variety of alternative investments from shipping and infrastructure, to private equity, catastrophe bonds and hedge fund replication.  Also among the list of most popular posts: more esoteric topics such as the "redemption option" and the "modified Sharpe ratio."   
 
So here's some good reading as you careen down the track...
Last Month's Most Popular Posts 
  1. Hedge fund fame and fortune comes with strings attached says new paper A new paper tries to put a value on the "redemption option" that a manager gives to investors and the "funding option" it gives to its prime brokers.  Too bad more hedge funds didn't read this before last year.

  2. Goldman HF Report: More consolidation ahead
    Holy mackerel!  A new report shows that the big fish are having a whale of a time - often at the expense of the small fry.

  3. Funds of funds knocked flat by Madoff. But are they down for the count? AllAboutAlpha.com Editorial Board Member Dr. Bob Swarup says some funds of funds risk "immortality through colossal failure."

  4. McKinsey survey finds 28% of asset managers are "depressed and in denial"  Feeling depressed and in denial about the cost cutting ahead for your asset management business?  You're apparently not alone.

  5. Shipping as an alternative investment Thought shipping was just a global growth play?  Apparently, it depends on how you measure it.

  6. Alternative Viewpoints: Using the Modified Sharpe & Information Ratios In this month's "Alternative Viewpoints" column, BNY Mellon's Neil Kotecha explains one of the reasons why the Sharpe Ratio isn't so sharp after all.

  7. Hurricanes as alternative investments How to hedge against the next Katrina...

  8. More "no fault divorce" clauses among signs that private equity investors gaining negotiating power Want a divorce? Invest in private equity and it becomes a bit easier...

  9. The Coming Rationalization? Financial institutions parting ways with their asset management businesses Looks like large financial institutions are starting to dump fuel to maintain altitude...

  10. Recent performance of HF clones shows they "were attractive during the crises of 2008"  During its recent hiatus from the front pages, hedge fund replication may have actually proven its mettle.
So that's the view looking back at the roller coaster track.  The question on everyone's minds now: What's ahead? 
 
Happy Alpha Hunting,
 
Christopher Holt, Managing Editor
AllAboutAlpha.com
[email protected]
 


Wednesday, Sept 23, 2009
rollercoaster

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