10 Recently Popular Papers from May-Oct 2016
Here is our list of some of the most popular Alternative Investing white papers from the last six months. (We've also included a 2015 paper on illiquid investments, which has racked up over 1000 views).
Long-term expected returns 2017-2021 (Robeco) - pp 89-95 for Alternative Asset Classes
Turn to pages 89-95 of this excellent Robeco paper to an analysis of the expected returns from hedge funds, private equity, real estate and commodities, for the next five year period.
Global Alternatives Survey 2016 (Willis Towers Watson)
This comprehensive 99-page document examines current trends in ten different alternative asset classes including hedge funds, private equity, infrastructure, real estate, illiquid credit and insurance-linked securities. The survey reveals how the preferences for alternative assets vary between different types of asset owner, and lists the top alternative asset managers within each category.
Asset Allocation with Private Equity (Mark Anson, 2016)
Private assets such as venture capital and private equity have long been a thorn in the side of CIOs and asset allocators. They lack liquidity which means that it is difficult to model their return streams in a risk budget or asset allocation model. In this paper, the author seeks to correct the misspecification of these, and other, illiquid assets, showing how the parameters of the underlying distributions are commonly underestimated. A new method is presented that reveals the true distributional parameters of these illiquid asset classes.
Investing in illiquid assets: A review (Robeco, 2015)
Is it worthwhile to invest in illiquid assets? What additional return from a liquidity premium should an investor expect for such investments, as compared to the reality, after the entry and exit costs are accounted for? In this paper, the authors discuss the evidence, both theoretical and empirical, on illiquid asset investments, commenting on potential diversification benefits of illiquid investments, and drawing attention to associated problems and risks.
Hedge Fund-ing the Pension Deficit (Cambridge Associates, 2016)
This research note by Cambridge Associates examines the role hedge funds can play in pension investment portfolios and why in the current environment particularly, they may be additive to a pension risk management strategy. The authors discuss key areas for consideration as plan sponsors contemplate implementing a hedge fund allocation.
The Long and the Short of It: The Quant Shorting Advantage (QMA, 2016)
Active extension, equity long-short, and equity market neutral products can be attractive for investors at any particular time, given investors' varied investment objectives and needs. That said, each of the three categories of shorting-enabled products can help address distinct issues facing investors today. QMA’s paper describes how short selling can allow investors to find alpha in often overlooked places, explains the three main categories of shorting-enabled equity products, and highlights the benefits of a systematic quantitative process.
Introductory Guide to Investing in Private Equity Secondaries (Capital Dynamics, 2016)
This 23-page paper has been authored by Capital Dynamics. In it, the authors take the view that private equity secondaries present a fantastic risk-adjusted return profile, providing attractive long-term returns while still displaying defensive attributes.
The alignment of interests between hedge fund managers and investors (AIMA, 2016)
This paper has been authored by AIMA. It investigates the methods used to bring together the interests of hedge fund managers and hedge fund investors. The paper's findings are based on a survey comprising 120 respondents with over $500bn of assets under management.
Private Debt: The opportunity for diversification with illiquid assets (TIAA, Sep 2016)
Amid market uncertainty and record-low interest rates, private debt - an emerging asset class - addresses institutional investors’ desire for yield and lower volatility. This 15-page paper by TIAA discusses the opportunity for illiquid asset diversification.
Factor Investing and Risk Allocation: From Traditional to Alternative Risk Premia Harvesting (EDHEC, 2016)
This comprehensive 62-page paper by EDHEC-Risk Institute examines factor investing beyond traditional factors. It seeks to analyse what the best possible approach is for harvesting alternative long/short risk premia. There is a growing interest in factor investing among sophisticated institutional investors. The replication of hedge fund factor exposure appears to be a very attractive concept. However, such strategies achieve relatively low out-of-sample explanatory power, regardless of the set of factors and the methodologies used.