Post Modern Investment : Facts and Fallacies of Growing Wealth in a Multi-Asset World

by Crowder, Garry B.; Schneeweis, Thomas; Kazemi, Hossein

• ISBN13: 9781118432235
• ISBN10: 1118432231
• Edition: 1st
• Format: Hardcover
• Copyright: 2012-11-15
• Publisher: Wiley

Summary

There is simply no book which can cover both the micro and the macro aspects of each alternative investment class, however, in the modern world of alternative investments there is little excuse for professional investors not to appreciate how the ideas presented in these books may lead to a series of widely held misconceptions. These include 1) the assumed diversification benefits of all hedge fund strategies (when in fact some have low correlations with stock and bond funds while others have high correlations), 2) the often used comparison of hedge funds with T-bill as a measure of manager alpha when in fact all mangers performance should be compared to a passive investment of similar trading and risk profile, and 3) all commodity products provide similar benefits when in fact gold is more of a currency asset than a traditional industrial commodity. More importantly, the return and risk characteristics of most of the alternative investment classes have changed overtime. In this book, the authors briefly describe a commonly held idea among institutional investors, then provide a response which debunks that idea, and finally discuss solutions and strategies for managing around those problem areas.

Author Biography

GARRY B. CROWDER, JD, MBA, MS, is a noted expert in the development and creation of multi-asset portfolio solutions and products. He has designed and implemented asset allocation solutions for leading multinational banks, insurance companies, and family offices. Mr. Crowder created and was managing partner of one of the first and largest hedge fund platforms based on managed accounts. In this capacity, he formed and led the team that created the Zurich Hedge Fund Indices and the Dow Jones Hedge Fund Benchmark Series. With over twenty years of investment experience, he is a founding Director of the Institute for Global Asset and Risk Management and the managing partner of Cortland Advisory Group, a global consulting and investment management firm focused on the risks and vagaries of alternative investments. Mr. Crowder has served as a managing director and member of the executive committee at Morgan Stanley Asset Management, managing partner of Traxis Strategic Asset Management Advisors and Chief Executive Officer of Crédit Agricole Structured Asset Management Americas.

THOMAS SCHNEEWEIS, PhD, is the Michael and Cheryl Philipp Professor of Finance at the University of Massachusetts Amherst and is the founding director of the Center for International Securities and Derivatives Markets. He is also the founding editor of the Journal of Alternative Investments, cofounder of the Chartered Alternative Investment Analyst Association, and a founding Director of the Institute for Global Asset and Risk Management. During his almost forty years of investment management experience, he has been associated with the development of alpha transfer and fund replication products, the creation and development of the Zurich Hedge Fund Indices and the Dow Jones Hedge Fund Benchmark Series, as well as being instrumental in the creation of the Bache Commodity Index. Schneeweis publishes widely in the area of investment management and is often quoted in the financial press.

HOSSEIN KAZEMI, PhD, CFA, is regarded as a leader in the area of asset allocation, and has published over thirty academic and practitioner articles in the area of asset pricing and asset allocation. He is a founding partner of Alternative Investment Analytics, LLC, and White Bear Partners LLC. Kazemi is a professor of finance at the University of Massachusetts Amherst and is the Associate Director of the Center for International Securities and Derivatives Markets. He is the current Program Director of the Chartered Alternative Analyst Investment Association.

Table of Contents

Preface xiii

Acknowledgments xxi

CHAPTER 1 Investment Ideas: Evolution or Revolution? 1

CHAPTER 2 Equity and Fixed Income: The Traditional Pair 31

CHAPTER 3 Hedge Funds: An Absolute Return Answer? 63

CHAPTER 4 Managed Futures: A Zero-Sum Game? 101

CHAPTER 5 Commodities: An Ever-Changing Balance 133

CHAPTER 6 Private Equity: Its True Value? 167

CHAPTER 7 Real Estate: The New World 199

CHAPTER 8 Asset Allocation: The Simple Way and the Hard Way 231

CHAPTER 9 Risk Management: An Oxymoron 257

CHAPTER 10 In Conclusion 285

Notes 289

Bibliography 295

About the Authors 299

Index 301