The Risk Assessment Spectrum: A Critical Tool for Investors Pt2
The ‘basic bucket’ explained
Let’s focus on the ‘basic bucket’ and look at each individual measurement.
When we are talking about deviation type statistics, a common one is Standard Deviation . Basically, you are measuring the variation of your returns around a mean – how spread out are your returns? Do they tend to be around the mean? Or are they all over the place or piled on either end of the spectrum? The problem with this is that if you try to use it as a risk statistic, you have to have some standard deviation to…
Read the full post >The Risk Assessment Spectrum: A Critical Tool for Investors Pt1
To what degree do you consider risk when making investment allocations?
Identifying portfolio risk adequately and efficiently is a common talking point among investors. Investors often get hung-up over the complexity of portfolio risk management, by overestimating the resources it requires and the costs involved. In this series of blog posts, we will explore what we define as the ‘risk spectrum’ by focusing on portfolio risk management in order to help you better understand the different analytics available for use within your risk management processes.
Risk can mean a host of different things to different investors. Investors often think…
Read the full post >PerTrac Joins The eVestment Family
By now you have probably heard the great news that PerTrac has been acquired by eVestment. We are very excited about this outcome – and very pleased to be working more closely with a company with whom we have enjoyed a great partnership previously. In addition, eVestment announced the acquisition of Fundspire today. Incredible! This brings together three of the premier technology brands in our industry. Together, we will offer the most complete portfolio of solutions in the market.
This really is great news for us, our clients and the industry as a whole. By combining PerTrac’s sophisticated investment management…
Read the full post >Hedge Fund Exceptionalism In A Year When Red Was The Standard
Last year was tough for hedge funds. Put simply, 2011 was the second worst performance year on record for the average hedge fund since 1996. Though the average hedge fund suffered substantial losses in 2008, the case could be made that it actually hedged, since it fared better than most major market indices. But while some key market indices ended 2011 flat or in slightly positive territory, the average hedge fund finished the year down.
Pundits were questioning what value a fee-charging manager that underperforms the market could possibly bring to a client. Stories in the press told of huge…
Read the full post >The Bigger They Are, The Less They(’ve) Fall(en)
The popular idiom, the bigger they are, the harder they fall , doesn’t always manifest itself in the hedge fund space. PerTrac’s Impact of Size and Age on Hedge Fund Performance: 1996 – 2011 study, finds that large hedge funds show the best stamina when performance across the industry is down.
In what became only the second year in which hedge funds of all sizes finished in the red since 1996—the first year being 2008—the average large fund again outperformed its peers in 2011. While last year’s annual returns for all three hedge fund size categories were negative, the average…
Read the full post >The United States and Europe Hold a Monopoly on the World’s Largest Funds
The United States, the birthplace of hedge funds, and Europe, the birthplace of funds of hedge funds (FoHFs), collectively housed more than 91% of the management companies of the world’s biggest hedge funds and over 93% of the globe’s largestFoHFs at the end of the first half of 2012.
A small contingent of 413 billion-dollar-plus hedge funds and FoHFs—less than 3% of 14,013 funds reporting information—were responsible for managing a leviathan sum of $1.353 trillion, or nearly 60 cents of every reported dollar within the industry. And nine out of ten of these funds’ management companies were located in the…
Read the full post >Infographic: Illuminating the World of Hedge Funds
The hedge fund industry has been undergoing rapid change. From new regulatory requirements like Form PF to newfound abilities to advertise offered by the JOBS Act, the pace of change is only accelerating. These changes not only bring needed transparency to the industry, but they also raise the profile of hedge funds among investors and non-investors alike. With advertising looming ahead, there’s little doubt that the profile of hedge funds will rise further.
With this in mind, PerTrac has decided to put together an infographic highlighting:
- Key industry milestones
- Facts and figures on the size and…
Read the full post >Hedge Funds Are Off To A Healthy Start In The First Half of 2012
Hedge funds bolstered their ranks and coffers in the first half of 2012, shrugging off tumultuous trading environments stemming from geopolitical uncertainty. Reported assets under management (AUM) of single-manager hedge funds rose to $1.892 trillion at the end of first half 2012, a 5.23% increase since year-end 2011. The number of single-manager hedge funds reporting information increased by 7.46% in the same time period, to a total of 10,754 funds.
Funds of hedge funds (FoHFs), however, were not as fortunate in the first six months of 2012. The reported AUM of FoHFs ebbed by 4.92% to…
Read the full post >Volatility Is Up In The First Half Of 2012, Not Necessarily A Bad Thing
Volatility is up by as much as 5.61 percentage points in the first half of 2012 across major world markets, driven by uncertainty arising from the Euro-zone debt crisis, slowing economies in emerging markets, as well as the rising tide of pending regulations and the presidential election in the United States. Markets in the East are showing the greatest volatility in the first half of 2012 and have had experienced the largest percentage point increases in volatility relative to the first half of 2011: Hong Kong’s Hang Seng Index increased by 5.61 percentage points, Japan’s TOPIX TR by 3.90 percentage points and its Nikkei…
Read the full post >Which Horse to Bet On: The Advantages of Allocating to Large Funds
Which Horse to Bet On: The Advantages of Allocating to Large Funds
Much has been written and discussed about the advantages of small hedge funds, including PerTrac’s own study that shows smaller funds outperform larger ones. Nimble and able to fly under the radar, small funds can traverse markets undetected. Their modest size fuels a hunger to generate returns so that they can earn a performance fee to augment their basic management fee which, by itself, may not provide an adequate paycheck. But what happens when markets sink?
While the returns of larger hedge funds may not be as…
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