The Markets September 11, 2013

Balancing Risk with Hedge Funds?

Institutions are looking to hedge funds for risk management and diversification, according to new research from Cerulli Associates.
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The September 2013 issue of The Cerulli Edge-U.S. Asset Management Edition examines how asset managers balance risk, and provides a close look at requests for proposals (RFPs) and database teams, exchange-traded funds (ETFs) and alternative investments.

“Asset managers have refined their approach to asset allocation over the past several years to emphasize risk-based approaches,” said Michele Giuditta, associate director at Cerulli. “Using a risk-based lens, managers aim to adjust their portfolios to offset periods of extreme volatility and market stress that may affect both equity- and credit-related investments in the same ways.”

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More recently, asset managers are experiencing demand for a range of hedge fund strategies—credit-related, global macro and event-driven ones in particular. Boston-based global analytics firm Cerulli believes that demand for these products should continue in the near term, given the low-interest-rate environment, ongoing global financial uncertainty, and steady merger and acquisition activity.

 

Products September 11, 2013

Wilshire Expands Data Collection Platform

Private equity, private real estate and real asset investment managers are now able to submit qualitative and quantitative performance information through Wilshire’s Compass Portal.
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Wilshire Associates Inc. launched Wilshire Compass Portal last year as an online platform for traditional asset managers to submit electronic due diligence questionnaires. The portal is accessed daily by Wilshire Consulting, the firm’s investment outsourcing and consulting practice, as well as Wilshire’s manager research group.

According to Charles Stunkard, managing director at Wilshire Associates, these enhancements enable private equity, private real estate and real asset investment management firms to provide updates on their product offerings, performance and other relevant developments on a regular basis. Previously, questionnaires would have been sent to investment managers only periodically.

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“The unique investment processes of private equity, private real estate and real assets necessitated adding questionnaires developed specifically for each of these fund types,” said Julia Bonafede, president of Wilshire Consulting. “While Wilshire has always researched alternative asset investment strategies on behalf of its institutional clients, this is an additional step to broaden our coverage.”

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