The rise of hedge fund betas will lead to a reclassification of alpha, according to a report to be released at the major Absolute Returns Funds Conference for super funds in Melbourne this month.
The conference, organised by ‘Investment & Technology’, has attracted registrations from more than 100 super fund representatives, plus asset consultants, multi-managers, fund-of-funds managers and others. Endorsed by the Alternative Investment Management Association (Australian chapter), it is being held at the Melbourne Convention Centre on September 16. Attendance is by invitation. The paper on ‘hedge fund beta’, prepared by US quant manager AQR Capital Management, will be addressed by Gregor Andrade, an AQR principal and former Harvard professor. Hedge fund beta is a group of risk factors commonly shared by hedge fund managers pursuing similar strategies. “;We believe these risk factors can capture not just the fundamental insights of hedge funds but also a meaningful portion of their returns… “;Ultimately we believe the rise of hedge fund betas will lead not only to the reclassification of alpha but also to better-diversified portfolios with greater transparency, improved risk control, and – perhaps most importantly – higher net returns,”; the paper says. Also to be released at the conference are the results of a survey of Australian institutional investor and asset consultant attitudes to alternatives in the current market environment. The report will be presented by Jon Glass, principal of FineAnswers, who assisted with its compilation. The report indicates the investors expect to provide increasing support for the alternatives sector but there are likely to be structural changes to their allocations. Opening speaker at the conference is Tim Barron, managing director of RogersCasey asset consultancy of the US.
Future Fund chief investment officer Ben Samild said that FY24 has been a great year for alpha creation, thanks to strong returns in equities and, unusually, across multiple hedge fund strategies all at the same time. He reflected the past few years have been “a difficult time to be an asset owner and to generate positive returns for risk assets” but the Future Fund is tracking well of its long-term mandate.
Simon Hoyle and Darcy SongSeptember 4, 2024
