Other Alternative Investments - Articles & White Papers
Articles and research on other alternative asset classes (those outside of mainstream alternatives). Some alternatives within this section are insurance-related, so there are a number of white papers on catastrophe bonds, reports on reinsurance securities, and securities backed by life settlements (secondary market for life insurance policies). Is volatility an asset class? This is debatable, but we have included in this section papers on volatility as an asset class or "opportunity class", including the use of short volatility to enhance portfolio returns. Master Limited Partnerships are another, relatively new alternative asset, and our listing includes white papers on MLPs, which provide relatively high income with stable cash flows. Other exotic alternatives include institutional investment in wine and institutional investment in art, with one paper examining the characteristics of art funds and their typical investments, while another examines the history of bubbles in the art market. PwC author a report on alternative investment asset classes which considers oil and gas MLPs and insurance flavored products, among others.
As more investors seek new sources of returns less correlated with the downward swings of the equity and bond markets, liquid alternative strategies have emerged as one of the more viable, and popular, investment options. Investors and their financial advisors are conditioned to select managers based on the asset class they invest in, frequently a less important consideration when ...
Macro investors adopt a top-down view of the world in which they analyze broad trends to allocate risk across asset classes, geographies, sectors, and currencies—resulting in a liquid strategy that aims to deliver strong risk-adjusted returns without having to rely on rising equity or bond markets. In this paper, William Blair's Dynamic Allocation Strategies team ...
This 2012 paper asks if the art and science of investment management can be reduced to a set of patterns that markets generally follow, in apparent violation of the efficient market hypothesis. Can investors reasonably expect to make money from the knowledge of these patterns, even after they have not only been identified but also widely exploited? Although one’s first ...
This paper explores liquid alternative strategies and how to implement them in portfolios whilst facing a complex set of challenges such as return and fees profiles and risk.
As a response to the current low rate environment, fund managers are exploring new opportunities in previously untried asset classes in search of greater yields. In response to this trend, PwC hosted a webcast discussion to provide insights into market activity within specific alternative asset classes. It included an analysis of the pros and cons of each asset class, structuring ...
This paper provides a framework for the selling of volatility on a broad equity index (large-cap US stocks particularly) in order to increase risk-adjusted returns.
For some time now, GMO have had concerns about the valuations of traditional asset classes. In this paper, Peter Chiappinelli, a member of the firm's Asset Allocation team, asks whether there is an asset class out there with the following attributes: a decently positive expected rate of return; little to no equity beta; and little to no interest rate duration? It's called Merger ...
This report by Deloitte provides interesting insights into the growing Art and Finance industry. The paper highlights the main trends and developments, but also seeks to capture and measure the changing perceptions and motivations among investors.
This paper explains the main characteristics of catastrophe bonds (CAT bonds). A reinsurer issues CAT bonds for indemnification against tail risks of major disasters such as hurricanes, earthquakes, or pandemics. The money used to acquire CAT bonds is placed in securities considered safe, such as United States Treasuries. The investor will then receive interest on these securities ...
With interest rates close to zero in major economies, and large-scale QE having taken place in many regions, investors are in uncharted territory. In an environment where the long-term economic outlook is uncertain, many investor may wish to protect their capital against the risk of unexpected inflation or consequent changes in the level of interest rates. One ...
The continuing efforts by OPEC and its allies to stabilize oil prices are further evidence of the game-changing influence of North America’s shale resource base, which is transforming global oil markets just as e-commerce has transformed the retail industry. The falling cost of shale production strengthens our conviction in the long-term case for North America’s midstream ...
The authors of this 39-page paper construct model-free and model-based indicators for the inflation risk premium in the U.S. and the euro area. They study the impact of market liquidity, surprises from inflation data releases, inflation volatility and deflated fears on the inflation risk premium.
Insurance-linked securities (ILS), such as catastrophe bonds and other types of risk-linked securitization, have moved considerably closer to mainstream investments since their inception in the mid-1990s. ILS continue to grow in terms of market size, scope of products, and investor profile. Although typical investors are still insurance companies and pension funds, other investors, ...
For investors in midstream energy, it’s important to understand a mutual fund’s structure, investment universe and philosophy, as these factors can have a potentially material impact on portfolio composition, after-tax returns and performance characteristics. We believe these considerations could take on greater significance in the current market, giving some funds a structural ...
In today’s compressed return environment, a growing number of pension schemes are looking to generate additional income by investing in private market assets. As a first step we would encourage trustees to get more familiar with the asset class. This guide has been written with that aim in mind, discussing the different sources of alternative income and the practical aspects ...
The growth of private market investment is perhaps the single largest institutional asset allocation theme of the post-2008 period. Yet real-life results can vary wildly from modelled risks and returns. Report after report has charted the mass migration of pension fund and other institutional assets towards private debt, infrastructure, unlisted real estate and private equity. ...
This article addresses eight challenges facing the private markets industry in 2016. A closer look at industry-wide dry powder, which reached a record high as of year-end 2015, offers some surprising results across different strategies and sectors. Private markets complexity, as measured by the breadth of strategies, structures, and terms, has increased dramatically over the last ...
