What’s in a Name (or an Acronym)?

GFC is in the lexicon. It’s not in mine. I refuse to add to the surplus of investment TLAs in  circulation. I refuse because naming induces a dangerously comforting sense that we’ve understood or even controlled that named. Hurricanes sound less malevolent, friendly almost, when called Kylie
or Jason. Once named our aches, pains and pathologies are noticeably softened and more readily accepted. We infer that someone, somewhere has identified, studied, and perhaps cured the pathology, an inference consistent with investment folklore that the greatest opportunities occur before an asset class
or strategy has been named. How re-assuringly benign and trustworthy are strategies pre-fixed by ‘enhanced’, ‘structured’, ‘protected’, and ‘balanced’? In Germany die Stratacticalstructuredquantamentalenhancedich
would surely induce a calming comfort and inspire trust. (more…)

Robert Garvy, chief executive officer of Florida-based INTECH Investment Management, talks to Kristen Paech about the benefits of mathematical investing, and the blurring of the line between passive and active investing.

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In this article, Ed Peters, co-director of global macro at First Quadrant, Ed Peters, examines what markets, or betas, are essential to fully diversitfy a global portfolio, while still achieving long-term goals; and how breadth is often confused with diversification.

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In the headiness of the bull market, institutional investors generally took on more risk and enjoyed fewer rewards than alternatives managers. But the crisis has provided an opportunity for both counterparties to redefine the balance in the LP/GP relationship, in which institutions are entitled to demand a true alignment of interests on returns, lock-ups and fees. Simon Mumme examines new research by US consultancy Cambridge Associates.

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In the nine months to March 2009, the $111.6 billion US fund, CalSTRS has vastly altered its asset allocation, decreasing its equities allocation, with global equities now 6.8 per cent underweight the target allocation.

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Recessions are traditionally considered a good time to invest in private equity, but liquidity constraints and the growth of unlisted assets within portfolios is causing pension funds to sit on the sideline. Sally Collier, London-based partner at global private equity fund of funds Pantheon Ventures, said there was a US$100 billion “mismatch” between the funds available for investment in the secondaries market and the “tidal wave of supply”.

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