Alternative Investing
Seeking Resilient Growth: Why It’s Time for the LGPS to Consider Liquid Alternatives
November 1, 2024
Most Local Government Pension Scheme (LGPS) investment portfolios rely on substantial equity allocations to drive growth over the long term, but heroic rates of earnings growth would be needed to maintain recent strong equity performance. While LGPS have been turning to private assets to seek future returns and diversification, we make the case for truly diversifying liquid alternatives as a viable and versatile complement to existing portfolios, and explore the benefits of a transparent, quantitative approach.
Arbitrage
Are SPACs Still Alive?
October 30, 2024
The recent rise and fall of SPAC issuance and the poor returns of SPAC mergers might suggest that SPACs are a flash in the pan, but this is far from the truth. To the contrary, SPACs have been a compelling asset class for more than two decades. We explore the SPAC market, its history, and its investment characteristics, including why we believe SPACs are a safe investment when managed properly, with the potential for significant upside.
Macroeconomics
An August of Discontent
September 5, 2024
We cover why investors should not shrug off the August market reversal as a blip. In an environment of continued macroeconomic uncertainty, episodes of volatility will likely persist. We discuss the importance of building a well-diversified portfolio that is resilient to a wide range of future economic scenarios.
Long-Short
Portable Alpha: Still A Great Solution For Improving Return Outcomes
July 30, 2024
In the face of lower-than-average expected returns for equities, some investors may be considering adding active management to their equity allocations. However, the evidence supporting active long-only equities has long been underwhelming. We review an alternative approach – portable alpha.
Alternative Investing
Is Your Equity Hedge Fund Portfolio Resilient Enough for Uncertain Times?
February 6, 2024
We analyze the historical macroeconomic sensitivity of traditional asset classes and major hedge fund strategies. We show that the average hedge fund is unlikely to provide meaningful diversification during periods of macro uncertainty, which are also typically difficult for traditional assets. However, long/short low-risk strategies have tended to exhibit low macro sensitivity.
Multi-Strategy
A Fresh Look at Multi-Strategy Alternatives
January 26, 2024
In this short piece, we review the case for multi-strategy alternatives, explaining why liquid, diversifying alternative strategies may have a decisive role to play in the tougher investment environment ahead.
Equities
Driving with the Rear-View Mirror
December 5, 2023
U.S. equities enjoyed a banner past decade. To analyze what assumptions investors need to have about the next ten years to expect a repeat performance, we decompose U.S. equity market excess-of-cash returns into four components – dividend yield, real earnings growth, multiple expansion, and the real return on cash.
Asset Allocation
Rethinking DC Portfolio Diversification
August 25, 2023
We make the case for an allocation to liquid alternatives as a viable and versatile complement to existing DC portfolios.
Arbitrage
Corporate Arbitrage
May 18, 2023
We introduce the main corporate arbitrage strategies, make the case for a multi-strategy approach, and review the role of a corporate arbitrage allocation within a broader portfolio.
Macroeconomics
Certainly Uncertain
May 16, 2023
We certainly find ourselves in uncertain times – but how uncertain are they? We show macro uncertainty is currently high versus history. We also address whether elevated macro uncertainty is likely to persist, or if we should instead expect a return to the low uncertainty environment. Lastly, we address the implications for investors, both in terms of possible returns to traditional assets, and as to what alternatives might prosper or decline in such an environment.