Are you happy now, Masa?The Opening Bell is powered by The Water Coolest. You can sign up for TWC's full, daily email newsletter here. In the meantime, check out one of the features from today's editi The post appeared first on dealbreaker..CASPER THE UNFRIENDLY IPOImagine waking up soaked - SHARE ARTICLE
Akin Gump has expanded its private equity and hedge fund practices in Asia with the relocation of partner Olivia Chung and senior counsel Divya Thakur from London and New York respectively, to the firm’s Singapore office… - SHARE ARTICLE
28th Jan 2020 - 11:08am
Stack launches institutional-grade bitcoin index fund in Asia
28/01/2020 - 11:08am
Stack, a provider of cryptocurrency trackers and index funds has launched an institutional grade bitc - SHARE ARTICLE
28th Jan 2020 - 10:39am
Akin Gump expands Asia Investment Management Practice in Singapore
28/01/2020 - 10:39am
Akin Gump has expanded its investment management capabilities in Asia with the relocation of inv - SHARE ARTICLE
28th Jan 2020 - 10:29am
IHS Markit hires risk management expert as Global Head of Financial Risk Analytics
28/01/2020 - 10:29am
IHS Markit a business information provide to over 500 asset managers including m - SHARE ARTICLE
28th Jan 2020 - 10:26am
Commodity pool operator and CEO to pay more than USD10m for misleading statements and supervisory failures
28/01/2020 - 10:26am
The Commodity Futures Trading Commission has issued an o - SHARE ARTICLE
28th Jan 2020 - 9:00am
Boutique accountancy service provides high responsiveness
28/01/2020 - 9:00am
Emerging managers and family offices can benefit from the services offered by boutique accountancy firms as - SHARE ARTICLE
Stockholm (HedgeNordic) – Crescit Protect, a hedge fund that seeks to generate market-like returns with lower volatility, has now joined the Nordic Hedge Index. The fund managed by Stockholm-based alternatives manager Crescit Asset Management returned 5.2 - SHARE ARTICLE
AlpenRoute Asset Management said Tuesday it may opt to suspend investor withdrawal of assets worth 181.7 billion won ($154.4 million) from its 26 open-ended funds by February, as the distrust of hedge fund managers in South Korea has risen. Of its 226.4 b - SHARE ARTICLE
Australia’s $168 billion Future Fund is looking to add more money to its $22.6 billion hedge fund program where it can find managers with spare capacity, to help protect the portfolio against a selloff in the equity market. - SHARE ARTICLE
Onuoha Fellowship & Scholarship Competition Launched During Conference
The BLK Capital Management, non-profit organization that exposes young African Americans to the field of active investment, will host its 2020 National Conference on Friday, Febru - SHARE ARTICLE
Much more than pure quant. And it will be perfect for the times to come. The problem with quant Quoting Stanley Druckenmiller (Duquesne Capital) who once said quant funds ($1tln of assets) had muted ... - SHARE ARTICLE
Bailey McCann, Opalesque New York: More governments are considering digital fiat currencies. However, none of them are fully developed yet. Delegates at the recent Opalesque Miami Roundtable offered their ideas about where digital fiat currencies might po - SHARE ARTICLE
Laxman Pai, Opalesque Asia: Public retirement systems managed to cut down their administrative and investment expenses and took other cost-efficiency measures in 2019, said a survey.
The majority (62 percent) of survey participants with assets exceeding $ - SHARE ARTICLE
Laxman Pai, Opalesque Asia: Chicago litigation investment firm GLS Capital says it has raised $345 million for its inaugural litigation finance fund.
GLS Capital Partners Fund I 's diverse institutional investor base includes global financial institutions - SHARE ARTICLE
From CNBC: Investors withdrew a net $98 billion from hedge funds in 2019, the largest outflows in three years, but UBS analysts have argued that this does not indicate waning popularity.
Data from U.S. research platform eVestment revealed that outflows i - SHARE ARTICLE
BlackRock apes Fundsmith with launch of focused global fund
From City Wire: Fund giant BlackRock has launched a global fund for European fund managers Alister Hibbert and Michael Constantis in the mould of Fundsmith Equity, the UK's most popular fund.
Hi - SHARE ARTICLE
From Portfolio Adviser: Crispin Odey's flagship European fund sank back into negative territory last year at a time when the hedge fund industry enjoyed its best yearly performance in a decade. Odey European languished near the bottom of funds in the FO H - SHARE ARTICLE
New York State Common allocates $1.7bn to alternatives
From PIonline.com: New York State Common Retirement Fund, Albany, made nine commitments totaling $1.7 billion, according to the website of Thomas P. DiNapoli, the state comptroller and sole trustee o - SHARE ARTICLE
From Bloomberg: The global rush for safer assets has fueled a huge jump in the world's stockpile of negative-yielding bonds, snapping months of decline in the value of subzero debt.
The pool of securities with a yield below zero surged by $1.16 trillion - SHARE ARTICLE
Empower Retirement appoints Jonathan Kreider as head of Great-West Investments
Empower Retirement announced the appointment of Jonathan Kreider as Senior Vice President and Head of Great-West Investments, the asset management unit of Empower Retirement.
- SHARE ARTICLE
Singapore launches new regime for cryptocurrency
From The Edge Markets: Singapore is introducing new payments legislation that offers global cryptocurrency firms a chance to expand their operations in the country by applying for operating licenses for the - SHARE ARTICLE
From PIonline.com: Kansas Public Employees Retirement System, Topeka, made a full redemption of its $205 million investment in open-end real estate fund UBS Trumbull Property Fund, managed by UBS Asset Management.
The $20.4 billion pension fund's board a - SHARE ARTICLE
UK Universities Superannuation to give DC plan access to private markets
From CIO: The pound;68 billion ($88.9 billion) Universities Superannuation Scheme (USS), the UK's largest private pension, will begin allowing members of its defined contribution fu - SHARE ARTICLE
Banks face eased Volcker restrictions on venture-capital funds
From WSJ: Big banks in the U.S. face looser restrictions on investing their own money in venture capital funds under the latest plan to ease the Volcker rule's limits on speculative trading, a - SHARE ARTICLE
Cerulli: Is an absolute return to the good days possible?
Opalesque Industry Update - Despite the disappointing performance of absolute return funds over the past 18 months, these products still offer opportunities for investors looking for diversificatio - SHARE ARTICLE
From Institutional Investor: Baupost Group's Seth Klarman has called the current state of alternative investments - especially private equity and venture capital - a "bubble" and raised questions about the valuations of the so-called uni - SHARE ARTICLE
$39.3bn pension fund Brunel Pension Partnership threatens to sack money managers who ignore climate crisis
From Yahoo: A pound;30bn ($39.3bn) pension fund has said it will vote down boards and sack asset managers whose investments fail to meet climate ta - SHARE ARTICLE
U.S. regulators charge advisory firm and fund manager with breaches
U.S. securities and derivatives regulators brought charges against a portfolio manager and an advisory firm for allegedly misrepresenting the risk management practices employed by a hedge - SHARE ARTICLE
Mrs. Steve Mnuchin (briefly) stands with Greta Thunberg, and realizes what the rest of us have known for a while.Being married to Steve Mnuchin means having to at the very least get used to all sorts of unsavory things. Evicting people from their homes, w - SHARE ARTICLE
When David Russekoff moved from the Upper East Side to Greenwich in 2009, he knew his new lakeside lifestyle would present tax complications. After all, the chief investment officer at Perry Capital still worked in Manhattan. And he and the missus were holding on to their summer home on Shelter ... SHARE ARTICLE
Those associated with the late and not terribly lamented alleged financier and convicted pedophile Jeffrey Epstein on the whole would prefer not to talk about him, or they might have done with him, and certainly not what he might have done for them. Leon Black would prefer to put it behind him. ... SHARE ARTICLE
Some credit-card issuers just mail it in when they print up those fake cardboard dummies for their applications, with a “Your Name Here” or “Jane Doe” or whatever. Bank of America just made up Chris L. Martin, which may or may not predate the popularity of Coldplay. When they do go for a real ... SHARE ARTICLE
Regulation D 506(c) Exemption General Solicitation Allowed for Private Fund Managers Under 506(c) Regulation D (“Reg. D”) offers issuers exemptions from registration of their securities under the Securities Act of 1933, as amended (the “Securities Act”). Most managers rely on Rule 506(b) which allows sale of securities to an unlimited number of accredited investors and […] SHARE ARTICLE
27th Jan 2020 - 12:31pm
New York tops London (again) as pre-eminent financial hub
27/01/2020 - 12:31pm
- The Big Apple is the world’s foremost financial hub, beating London into second place for the second year running, according to a new report from Duff & Phelps.
- Read the full story at Private Equity Wire…
Surveys & research SHARE ARTICLE
By Bill Kelly, CAIA Association CEO In the interest of brevity, I am going to skip the salutation and get right to the heart of the matter. As my name implies, I am Leery of the lofty promises that depend on solving our long-term problems and I do remain in Read More SHARE ARTICLE
UPS AND DOWNS “How’s business?” - Jim Cramer “Oh, it has its ups and downs…” - Boeing CEO Dave Calhoun, probably.
Boeing is weighing a decision to potentially cut production of its 787 Dreamliner … a move that would mark the second decrease in output of the 787 since October.
The aerospace ... SHARE ARTICLE
27th Jan 2020 - 10:55am
New York Institute of Finance and Google Cloud launch a Machine Learning for Trading Specialisation on Coursera
27/01/2020 - 10:55am
- The New York Institute of Finance (NYIF) and Google Cloud have launched a new Machine Learning for Trading Specialisation available exclusively on the Coursera platform.
- The Specialisation helps learners leverage the latest AI and machine learning techniques for financial trading.
- Amid the Fourth Industrial Revolution, nearly 80 per cent of financial institutions cite machine learning as a core component of business strategy and 75 per cent of financial services firms report investing significantly in machine learning. The Machine Learning for Trading Specialisation equips professionals with key technical skills increasingly needed in the financial industry today.
- Composed of three courses in financial trading, machine learning, and artificial intelligence, the Specialisation features a blend of theoretical and applied learning. Topics include analysing market data sets, building financial models for quantitative and algorithmic trading, and applying machine learning in quantitative finance.
- “As we enter an era of unprecedented technological change within our sector, we’re proud to offer up-skilling opportunities for hedge fund traders and managers, risk analysts, and other financial professionals to remain competitive through Coursera,” says Michael Lee, Managing Director of Corporate Development at NYIF. “The past ten years have demonstrated the staying power of AI tools in the finance world, further proving the importance for both new and seasoned professionals to hone relevant tech skills.”
- The Specialisation is particularly suited for hedge fund traders, analysts, day traders, those involved in investment management or portfolio management, and anyone interested in constructing effective trading strategies using machine learning. Prerequisites include basic competency with Python, familiarity with pertinent libraries for machine learning, a background in statistics, and foundational knowledge of financial markets.
- “Cutting-edge technologies, such as machine and reinforcement learning, have become increasingly commonplace in finance,” says Rochana Golani, Director, Google Cloud Learning Services. “We’re excited for learners on Coursera to explore the potential of machine learning within trading. Looking beyond traditional finance roles, we’re also excited for the Specialisation to support machine learning professionals seeking to apply their craft to quantitative trading strategies.”
Trading & Execution
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27th Jan 2020 - 10:18am
Alt UCITs return 4.2 per cent in 2019
27/01/2020 - 10:18am
- The LuxHedge Global Alternative UCITS Index posted a gain of +4.2 per cent over the past year and more than 80 per cent of funds ended the year in positive territory.
- Read the full story at Wealth Adviser…
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27th Jan 2020 - 10:16am
London loses out to New York as pre-eminent financial hub for second year running
27/01/2020 - 10:16am
- With the Brexit deadline looming over London this week, confidence in the City as the world’s pre-eminent financial hub has dipped even further this year, according to by findings from the latest Global Regulatory Outlook (GRO) reportby Duff & Phelps.
- The survey of senior finance professionals from around the world, found that only 33 per cent currently see London as the foremost globalfinancialhub, falling more than 20 per cent over the last two years. Meanwhile, New York gained momentum this year, with the majority of respondents (56 per cent) regarding it as the world’s most important financial centre, a 33 per cent increase over the last two years.
Even with trade talks between the EU and UK underway, the survey suggests a significant lack of optimism. When asked where the world’s most powerful financial hub will be in five years, respondents see both London and New York losing ground. While the decline for New York is relatively modest, with half (50 per cent) still expecting it to be the leader, confidence in the UK’s future is far weaker. Just 22 per cent predict London will be the major financial centre in five years’ time.
However, very few respondents see any European city taking the lead as pre-eminent financial hub in five years. The outlook for cities such as Paris or Frankfurt certainly does not come close to replacing New York or London with only 1 per cent and 2 per cent of respondents, respectively. Rather, it is emerging centres in Hong Kong (4 per cent), Singapore (5 per cent) and, particularly, Shanghai (9 per cent) that are expected to see the biggest growth.
- Monique Melis, Managing Director and Global Leader of Compliance and Regulatory Consulting at Duff & Phelps, says: “It is difficult to avoid the suspicion that three years of uncertainty since the Brexit vote has contributed to London’s fall. While London was still considered the pre-eminent financial hub in 2018, it could be that the shockwaves of the ongoing EU negotiations have started to show. If this is the primary reason for London’s changing fortunes, then the resolution of the UK’s departure could see it bouncing back. After all, the financial services sector contributes about 7 per cent of the UK economy’s output and GBP29 billion in tax revenues, so the UK Government has a strong incentive to make London a more attractive place to do business post-Brexit.”
- If there is any consolation for the City, it is that the UK is considered to have the most favourable regulatory regime for financial services in the world. Survey respondents rated the UK’s regulatory regime first (30 per cent), followed by the US (26 per cent) and Singapore (18 per cent).However, outside of Brexit, businesses are facing issues such as the cost of compliance (21 per cent) and the war for talent (23 per cent). Indeed, the cost of compliance has continued to grow. The survey found that the proportion of firms spending more than 5 per cent of their overall budget on compliance is now over a third (34 per cent), an increase from 11 per cent in 2018.
- Melis adds: “We must accept the fact that much of the global regulation we’re seeing is necessary to deliver a stable market. But we cannot ignore the impact that extensive, and often uncoordinated regulatory change has had on competition and services. Whereas big banks and other financial services giants may well be willing to shoulder the regulatory burden and costs, smaller organisations and low margin consumer businesses are both likely to suffer. If the Government can position the UK as having a more favourable regulatory environment and separate it from the red tape of European regulation, then we may see the UK win back its crown and attract new talent to the sector.”
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On June 25, Institutional Investor will honor the hedge fund industry’s best managers and asset allocators at a gala dinner at the Mandarin Oriental Hotel in New York City. Who will decide which firms ... SHARE ARTICLE
The Sustainability Accounting Standards Board (SASB), a non-profit organization has developed industry-specific standards across environmental, social, and governance topics, working toward a consensus on the sorts of disclosures that the issuers of securities should and will make to their investors. In November 2018, SASB released complete standards for 77 industries. Read More SHARE ARTICLE
Laxman Pai, Opalesque Asia: New data from Pitchbook says that 2019 was a record year for European Private Equity fundraising, with €86.4 billion raised across 89 vehicles.
Nearly three-quarters of total capital was raised in just two regions: the UK Ireland and France Benelux.
The UK ... Article link SHARE ARTICLE
Laxman Pai, Opalesque Asia: Real estate deal value and volume in the U.S. fell during the fourth quarter of 2019 compared with the prior quarter amid ongoing geopolitical tension, a decline in cross-border capital flows, and the prospect of tougher regulation from the local to the federal level.
Acc... Article link SHARE ARTICLE
The global hedge fund industry saw outflows of -$97.93 billion in 2019, according to the just-released December/Year-End 2019 eVestment Hedge Fund Asset Flows report.
Despite these redemptions, total hedge fund industry AUM rose past $3.3 trillion at the end of the year due to performance gains. Whi... Article link SHARE ARTICLE
Tiger Global raises $3.75 bn for 12th venture fund
From Deccan Herald: For the second time, Tiger Global Management has raised $3.75 billion for a venture fund as investors clamour for more private-equity deals. Clients were told about the closing of the Private Investment Partners XII fund in a le... Article link SHARE ARTICLE
From Bloomberg: First came the Tiger Cubs: acolytes of hedge-fund legend Julian Robertson. Now come the Tiger Global cubs: acolytes of Robertson protege Chase Coleman.
The latest is Neeraj Chandra, who left Coleman's Tiger Global Management in 2017 and is launching his own investment firm with as m... Article link SHARE ARTICLE
Boston Retirement earmarks $80m for private markets, $50m for real estate
From PIonline.com: Boston Retirement System committed a total of $80 million to a private markets mandate and $50 million to three open-end value-added real estate funds. At its Dec. 18 board meeting, the board committed $80... Article link SHARE ARTICLE
JPMorgan takes contrarian view of energy stocks
From Institutional Investor: JPMorgan Chase Co.'s asset management group sees investment opportunity in beaten-down energy stocks, a contrarian view as it looks beyond the sector's reputation for "poor capital discipline."
&q... Article link SHARE ARTICLE
From PIonline.com: Corporate pension funds in the world's largest retirement markets posted stellar gains in 2019 on the back of aggressive monetary policy stimulus, but many ended the year with little to show in terms of improved funding levels.
The U.S. Federal Reserve Board's abrupt shift to mon... Article link SHARE ARTICLE
Hedge fund billionaire Glenn Dubin retires from industry after 40 years
From Reuters: Glenn Dubin, who made a fortune building and managing hedge funds, is retiring from the industry after 40 years to focus on private investments, the billionaire investor said.
Dubin, 62, will turn over management... Article link SHARE ARTICLE
U.S. regulatory uncertainty is the biggest issue for crypto firms
From The Block Crypto: Interviews of crypto firms conducted by The Block shows - perhaps unsurprisingly - that regulatory uncertainty in the U.S. remains the top barrier for companies working in the crypto and digital asset space.
N... Article link SHARE ARTICLE
From FT: "If you don't accept technology, you better go to another place, because no place here is safe," said Robert Rauschenberg, one of the most iconic visual artists of the last century.
The message is not lost on fund managers as they enter the new decade - one that will be s... Article link SHARE ARTICLE
Are investors too bullish on listed European managers?
From FT: Considerable optimism about the outlook in 2020 for new business growth has been priced into the shares of some of Europe's best-known asset managers, raising questions about whether the risks facing these companies are being accuratel... Article link SHARE ARTICLE
China's rising STEAM education sector draws investor interest
From Nikkei: STEAM is short for science, technology, engineering, art and mathematics, and New Factory Maker Education and other education providers are racing to develop curricula that they can sell to parents and schools looking to giv... Article link SHARE ARTICLE
Private equity firms are sitting on $1.5tn in unspent cash, and looking to raise more
From Fortune: It's a new year and a new decade, and private equity finds itself in something of a paradox. PE firms have record amounts of unspent cash on hand, and they plan on heading back to the markets to rais... Article link SHARE ARTICLE
Startup success can be predicted by employees' connections, study finds
From Times of Israel: The success of startup companies is heavily influenced by their existing professional connections, a study has found.
Researchers in the UK constructed a massive visual network showing connections between... Article link SHARE ARTICLE
$39bn pension pool slams financial system as 'not fit for purpose' on climate change
From City AM: A pound;30bn ($39bn) pool of pension funds is threatening to fire investment managers that fail to reduce their exposure to climate risk, condemning the financial system as "not fit for purp... Article link SHARE ARTICLE
From PIonline.com: Foreign investors in U.S. private equity, real estate and venture capital deals are facing new regulations that could impact the terms, timing and even viability of those investments.
Earlier this month, the Treasury Department unveiled new regulations for how the federal governm... Article link SHARE ARTICLE
Hedge fund steps up fight against Premier Oil's North Sea deal spree
From Standard: A hedge fund ramped up its attack on Premier Oil on Friday, questioning the explorer's sums on a recently announced acquisition spree.
ARCM, a Hong-Kong based fund founded by former Wall Street debt trader Alp Erci... Article link SHARE ARTICLE
Billionaire Glenn Dubin — caught in a firestorm over his controversial ties to dead sex predator Jeffrey Epstein — said Friday he’s retiring from his hedge fund. The 62-year-old money manager — who… - SHARE ARTICLE
Glenn Dubin leaves hedge fund, distances himself from Epstein reports - Business Insider Business Insider Hedge fund veteran Glenn Dubin retires Financial Times Exclusive: Hedge fund billionaire Glenn Dubin retires from industry after 40 years Reuters Billionaire Glenn Dubin retiring from hedge fund amid fury over Jeffrey Epstein ties New York Post View full coverage on Google News SHARE ARTICLE
The Swiss may not take money laundering or tax evasion as seriously as some other countries, but insider-trading is another matter, as Kashya Hildebrand will tell you. Now, they don’t take it quite as seriously as the U.S. takes all the things of which John Stumpf stands accused, but someone’s ... SHARE ARTICLE
For much of the last two years, Barclays CEO Jes Staley has been locked in a life-or-death struggle for its investment bank. Some, including one very annoying and persistent shareholder, believe it should go away. Jes Staley likes it—likes it enough to run the place himself—and has, to date, ... SHARE ARTICLE
Sure, Goldman Sachs has been involved in the occasional insider-trading scandal. And, yes, it’s been known to hire the occasional bigamist and educational fabulist who—OK—may have worked with all sorts of other Goldmanites to separate Malaysia’s sovereign wealth fund from $6.5 billion. And yes, the ... SHARE ARTICLE
On the one hand, it’s a very good thing that Major League Baseball is going to sponsor the United States national softball team as it prepares for this summer’s Olympics. It’s something that the league is doing not because of an obligation, but because it sees a good opportunity to be associated ... SHARE ARTICLE
American society—and really Western society more generally—has been so badly eroded and atomized that we elected Donald Trump president (and similar charlatans to similarly high office), and are probably going to do it again. In spite of his occasional disagreements with the leader of the ... SHARE ARTICLE
24th Jan 2020 - 2:03pm
Alternative data sets … quality is the challenge, not quantity
24/01/2020 - 2:03pm
- There are an estimated 445 alternative data providers in the funds industry, serving the needs of both traditional and alternative fund managers. This is, according to alternativedata.org, an industry that is projected to be worth USD350 billion in 2020. But while there is no doubting the quantity and diversity of data sets one can acquire, how valuable really are they?
- It is a valid question when one considers that the average dollar spend on alternative data, for 2020, will be USD158K for those running less than USD1 billion in AUM, rising to an estimated USD764K for those running north of USD1 billion.
- Investors will no doubt want to know what kind of return on investment such an annual outlay is yielding, and whether these data sets are truly able to improve the investment process. To some extent, the sheer pace of technology advancement makes it nigh-on impossible for any serious fund manager to completely overlook this option. After all, we live in a time where “AI”, “machine learning” and “alternative data” are thrown into conversation with great gusto, as managers seek to position themselves as being on point with market trends. Heaven forbid one may look out of vogue.
- How one utilises these data sets, though, should be observed with the same focus as any other aspect of the trading process. Picking which alternative data to use is far from straightforward. It is also, arguably, more additive to discretionary managers than the higher frequency traders and quants who need to act on signals in short timeframes.
- Most of the alt data sets are built on equity markets, given the enormity of publicly traded information. Applying them to futures markets, where trading on OTC market still dominates, is more challenging.
- I spoke recently to the head of quant trading at a London-based fund platform, which supports a mix of both discretionary and quant fund managers. On condition of anonymity, he shares the following anecdote: ”I have heard about stellar data sets on UK oil reserves but the reality is, if someone really had found such a data set to premise the production or consumption of a commodity, they wouldn’t tell the marketplace about it.
- “I think the real value of these data sets is still marginal.”
- Speaking at last year’s ABN AMRO Amsterdam Investor Forum, Rani Piputri, Head of Automated Intelligence Investing, NNIP (a Netherlands-base investment manager), said that how one defines a good alternative data set depends on one’s investment process. “We’ve found some alternative data providers who can provide us with very good equity analyst estimates,” she said.
- Alternative data is typically speaking, relatively slow. It tends to be related to company fundamentals and usually it is based on monthly corporate updates. There isn’t much alternative data in real time that can have an impact on price. Most alternative data sets are used as leading indicators ahead of big fundamental announcement such as corporate earnings.
- For a short-term trader, monthly data does not necessarily offer much value in the search for alpha. But for discretionary managers with an active short book, alternative data sets have the potential to help a manager build an investment thesis around shorting a particular stock, ie using satellite imagery to determine car production in China, for example, or the number of cars in supermarkets or retail parks.
- In some respects, picking the right data sets is a skill in and of itself, just like stock picking. The biggest quant shops on the street have the budgets to buy the best data available; and by default, the highest quality data. That’s not the case for the vast majority of the hedge fund firmament.
- “The managers on our platform trade futures, they are short-term traders and they are modest in AUM. Combine those factors and that is why, for us there is no real use for alternative data sets,” remarks the quant manager.
- He is quick to point out though, that he does see value in using them in the discretionary trading space, noting they can be additive when doing a deep dive into assessing a company’s true value: “A discretionary trader looking at aviation stocks might use an alt data set that provides information on employee satisfaction, or supply chain costs, to build long and short positions.
- “We are at an age where technology is allowing us to aggregate data from the bottom up and apply statistical tools to improve our reasoning. It is a big shift.”
- One manager who is actively utilising alternative data sets is New York-based Wavelength Capital Management, which focuses on factor-based fixed income analysis. Its co-founder, Mark Landis, tells me that one basic premise behind Wavelength’s investment process is that technology has commoditised many traditional data sets, thusmaking markets more efficient. The traditional, one-dimensional edge of older traditional money managers is harder and harder to identify and take advantage of.
- “We absolutely utilise non-traditional data sets along with traditional,” says Landis.
- “But remember, in fixed income which has historically been an OTC market, attaining proper historical data sets in such markets as credit, MBS etc., has been very difficult.We utilise both machine learning and deep learning (AI) to process historical, fundamental and non-traditional data.Advances in processing power have made it possible to identify patterns through filters with more depth than a simple chart of prices.”
- I ask Landis about the quality versus quantity challenge faced by managers, and the issue of cost versus opportunity gained.
- He responds: “One needs to know what to do with it. The volume of financial market data is enormous and growing daily. Deciphering signal from noise, as with all data sets,represents the key to unlocking opportunity and a true edge versus wasting money.”
- He thinks that applying deep learning to the universe of big data offers the greatest investment potential.
- Over the next few years, the 5G revolution is going to change our lives even more considerably than we’ve seen over the previous decade. It will unleash enormous processing power, allowing computers to crunch through slews of alternative data in near real-time.
- The quant trader pauses when I suggest this and offers the following concluding remark:
- “Before going to the millisecond, or something closer to real time, the next step should be to get right the quality and accuracy of data. There will be a big premium for those who can gather high quality, clean data to gain an edge in the market.
- “I think managers will become more qualitative in how they use alt data sets in my opinion. Quantity is not the challenge … quality is.”
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Billionaire manager Glenn Dubin is retiring from running his hedge fund to focus on direct investing through his family office. Dubin, 62, is turning over management of the $1 billion Engineers Gate ... SHARE ARTICLE
PAYBACK'S A B*TCH You think your 2020 is off to a bad start? Try being a former Wells Fargo CEO... As if being the punchline of every fin-twit sh*t-post (ok, maybe Deutsche Bank and Nomura took some of the heat too) isn’t bad enough, two former execs are facing up to $59M in fines from the ... SHARE ARTICLE
24th Jan 2020 - 10:28am
The Year of the Rat: China’s economy is strong but investors need to be on their guard
24/01/2020 - 10:28am
- As China enters the Year of the Rat this Saturday (25 January), Jasmine Kang, Portfolio Manager at Comgest, an independent, international asset management group, believes that China’s growth has become more sustainable but that high-quality companies are still rare and strong stock selection is more important than ever …
- “The rat might be a shrewd and unpopular creature in our culture but in China it stands for diligence, intelligence, energy, determination and achieving goals, so it is appropriate that it gives its name to a year in which China’s growth model is becoming more sustainable and its equity markets more transparent and open to foreign investors.
“At least economically the gods have been kind to the country in recent years. The shift in the Chinese economy from credit and infrastructure-driven growth to innovation, services and consumer-oriented growth is almost complete and real incomes are growing steadily. The opening of the Shenzhen and Shanghai stock markets is proceeding at a rapid pace and China’s long-term potential as a financial centre is huge. Although the share of foreign investors in Chinese A shares is still low, foreign institutional investors’ access to the Shanghai and Shenzhen stock markets will continue to advance in the coming years, promoting capital inflows and professionalising the capital market. The improvement of transparency and ESG issues is still in its infancy, but more companies are already reporting in accordance with international standards.
“Despite the positive changes in the general environment, China remains a challenging place for stock picking. High-quality companies still seem few and far between. In China it is particularly important for minority shareholders to be in the same boat as the company's decision-makers and managers. Governance structures are of crucial importance for the success of long-term oriented quality growth investors. Investors should have a diligent rat-like squint at potential investments to see if their growth is underpinned by strong and open governance structures.
“Shandong Weigao Group Medical Polymer Co, Ltd is a prime example of how improvements in governance structure favour minority shareholders. The company has long been a strong brand in the market for medical consumables but its growth was below average for a long time. Equity investments were reserved for top management only and were not tradeable. Through the reform of the Chinese capital market, these shares have become tradeable and, thanks to employee participation programs, they have become an important instrument for long-term corporate management and a catalyst for accelerating growth. Earnings per share and the company share price have doubled over the past three years.
“Despite being known for its high volatility, in the long term, the outlook for the Chinese equity market is positive. Over the past 12 months, the IT and healthcare-heavy 'China Shenzhen' index, with 36% value growth in USD terms, has been one of the best stock markets in the world and has even outperformed the Nasdaq. In the Year of the Rat, investors should keep a sense of proportion and not just chase after rising prices, but rather invest in quality over the long term and be patient to achieve an optimal risk-return profile for their Chinese investment.”
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Billionaire Glenn Dubin — caught in a firestorm over his controversial ties to dead sex predator Jeffrey Epstein — said Friday he’s retiring from his hedge fund. The 62-year-old money manager — who, ... SHARE ARTICLE
“From the point of ignition to the final drive, the point of the journey is not to arrive.” - Neil Peart New clues are emerging on the nature and pace of change... Here's the setup: Unlikely and unexpected virtuosity often serves as the catalyst for a dynastic run of success. Moreover, legend has it, [...] SHARE ARTICLE
Hedge fund Asia Research and Capital Management (ARCM) on Friday raised fresh concerns over Premier Oil's plan to have its creditors vote on the planned acquisition of North Sea assets under a scheme ... SHARE ARTICLE
There is a high rate of failure among quant funds. These include smart beta, factor investing, statistical arbitrage, and CTAs. Such false positive strategies are a widespread industry problem. Since psychiatrists have long traded on the ability of the human mind to find an elaborate narrative in a random ink Read More SHARE ARTICLE
Mean variance optimization (MVO) is a simple, yet well-regarded asset allocation technique designed to create a portfolio that maximizes it’s expected level of return for a given level of standard deviation. Many institutions construct diversified portfolios using this simple technique, attempting to maximize their risk-adjusted returns. While popular with many Read More SHARE ARTICLE
Bailey McCann, Opalesque New York: What will it take for blockchain and cryptocurrencies to expand? Delegates at the recent Opalesque Miami Roundtable suggest that the digital assets market needs a 'killer app ' that will usher in a new era of widespread use. To get there, however, more infrastruct... Article link SHARE ARTICLE
Laxman Pai, Opalesque Asia: Almost 60% of S P 500 companies hold assets at high risk from climate change, according to an S P Global presentation at the 2020 Annual Meeting of the World Economic Forum in Davos.
The findings revealed that in the S P 500 Index own physical assets across 68 countries ... Article link SHARE ARTICLE
Laxman Pai, Opalesque Asia: 2019 saw record private equity fundraising with mega PEs and tech-focused PEs attracting the lion's share of capital, said a study.
Mega-funds dominated the PE space in 2019, pushing up fundraising to $301 billion for a 52% gain compared with 2018, said PWC in its quarte... Article link SHARE ARTICLE
Laxman Pai, Opalesque Asia: North America continued to attract the highest number of venture capital (VC) investments and funding during the fourth quarter (Q4) of 2019 though the region experienced a dip in investments.
According to a report by GlobalData, North America experienced a decline in VC... Article link SHARE ARTICLE
Whale Rock launches long-only funds
From Institutional Investor: Whale Rock Capital Management is the latest hedge fund firm to launch long-only funds. The Boston firm headed by Alex Sacerdote disclosed in a regulatory filing it has raised money for three related funds: Whale Rock Long Opportunitie... Article link SHARE ARTICLE
The SS C GlobeOp Forward Redemption Indicator for January 2020 measured 2.26%, down from 4.95% in December.
"SS C GlobeOp's Forward Redemption Indicator for January 2020 was 2.26%, a favorable reading compared to the 2.70% reported a year ago, as well as compared to historical averages,&am... Article link SHARE ARTICLE
Boston Retirement earmarks $80m for private markets, $50m for real estate
From PIonline.com: Boston Retirement System committed a total of $80 million to a private markets mandate and $50 million to three open-end value-added real estate funds.
At its Dec. 18 board meeting, the board committed $8... Article link SHARE ARTICLE
Goldman says fast money all-in and stocks can go higher
From AFR: A growing cohort on Wall Street frets a sharp reversal could soon hit this year's stock melt-up now that fast-money quants have ramped up their speculative bets. But the real money has the potential to grab the baton even if these sy... Article link SHARE ARTICLE
Renaissance Technologies founder names his son co-chairman
From FT: Renaissance Technologies founder Jim Simons has named his son co-chairman of the quantitative hedge fund's board and added five new directors, as he steps up preparations to hand over the secretive $75bn manager to the next generat... Article link SHARE ARTICLE
Securities regulator of India bets on blockchain
From Coin Telegraph: The Chairman of Security and Exchange Board of India(SEBI), Ajay Tyagi makes a bet on blockchain technology and urges exploration of the best possible usage of blockchain in securities markets.
SEBI is the regulator of the India... Article link SHARE ARTICLE
From Institutional Investor: Asset managers are increasingly turned to mergers and acquisitions in an attempt to solve the problem of slowing growth and falling fees. In five years, PricewatehouseCoopers expects 20 percent of asset managers to be acquired or eliminated.
In PwC's fourth quarter deal... Article link SHARE ARTICLE
Agencies to propose 'covered funds' revamp in Volcker Rule
From American Banker: The Federal Reserve Board and Federal Deposit Insurance Corp. will meet next week to consider a proposal to simplify the "covered funds" portion of the Volcker Rule.
Regulators in August finalized a ... Article link SHARE ARTICLE
From Barrons: All three major stock indexes hit record highs in 2019, which made it all the more challenging for active fund managers to beat the market. Among the biggest losers were quant funds-those run by computer algorithms analyzing large sets of data.
Their underperformance will likely conti... Article link SHARE ARTICLE
More private equity firms are becoming targets of deal making
From Institutional Investor: Private equity firms are increasingly the targets of deal making, a twist as the industry matures, according to Dechert attorneys. The trend is being driven by founders' desire to sell stakes in the firms the... Article link SHARE ARTICLE
From CNBC: Seth Klarman's Baupost Group posted gains in the high single digits last year, lagging the U.S. stock market. Klarman said in a letter to clients that several factors, including passive investing, have created pricing errors in the stock market.
"We believe that ongoing selling ... Article link SHARE ARTICLE
Infrastructure funds have become a way around decarbonisation targets
From FT: The infrastructure investing business appears to have turned itself into a perpetual motion machine. The underlying assets - toll roads, pipelines and wind turbines - are teetering on a pyramid of thinner profits and hig... Article link SHARE ARTICLE
Perhaps, like the apparently mythical figure of the investor who’s sure, in spite of all available evidence and history and the apparent will of an angry God, that Wells Fargo has turned a corner and is ready to start printing money for shareholders, there really was a bank out there somewhere in ... SHARE ARTICLE