News and Media

Hedge fund investors apply core-satellite

Link to P&I article with a quote from Andrew Beer Strategy an answer to issue of higher fees for mediocre performance by Christine Williamson — February 6, 2017 Excerpt: Institutional investors are beginning to dramatically restructure their hedge fund portfolios, pairing a core allocation of cheaper alternative beta investment strategies with a satellite portfolio of alpha-generating hedge funds. The trend is nascent but gradually gaining converts, attracting interest from asset owners fed up with paying hedge fund managers high fees for promised alpha that turns out to be market beta, observers said. Money managers and consultants report they’ve seen huge …

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It’s Time to Clean Up Managed Futures Mutual Funds

Our latest commentary on the liquid alts space has been published in WealthManagement.com: It’s Time to Clean Up Managed Futures Mutual Funds “Fair fees” and “managed futures” have been the investment equivalent of an oxymoron. by Andrew Beer Click here to read the full article

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Barron’s: How Some Hedge Funds Have Ripped You Off

In his most recent article in Barron’s, Andrew Beer lays out the unsavory ways many funds have been marketed by wealth managers. Excerpt: If you’ve been invested in hedge funds over the past decade, you probably feel cheated. And you should. No, the problem isn’t that you were overcharged by hedge fund managers – they’re simply tried and true capitalists seeking to maximize profits. The bigger issue is that the cottage industry of advisors, consultants and private bankers who put you into hedge funds in the first place were supposed to watch your back…and didn’t. The problem: Most people in …

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Barron’s: Hedge Fund ETFs Disappoint

ETFs that aim to replicate hedge fund returns employ many different strategies—with mixed results. By Sarah Max — December 24, 2016 Excerpt: “Alternative beta “tends to produce more predictable results,” says Andrew Beer, managing partner at Beachhead Capital Management, which uses exchange-traded funds to create its own hedge fund replications for advisors and wealthy individuals. His method: Track the 40 largest long/short hedge funds and use historical information to predict how they will respond to market changes. He then uses ETFs to choreograph similar moves. Barron’s subscribers: click here to read the full article

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Hedge funds fees take a trim

Link to FT article with quote from Andrew Beer Traditional ‘2 and 20’ fees are becoming outdated as managers seek to keep investors happy by: Lindsay Fortado — December 22, 2016 Excerpt: The willingness to negotiate on fees shows how the longstanding 2 and 20 formula for hedge fund fees is becoming outdated. While there has always been pressure on hedge fund managers to reduce their fees, some of the highest in finance, lacklustre performance this year by several of the biggest names in the industry has forced funds who once billed some of the highest rates in the industry …

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How Equity Long/Short Hedge Funds Really Generate Alpha

As Andrew Beer explains in his most recent article in Hedge Fund Intelligence, the largest source of alpha probably isn’t what you think. The typical investor assumes that equity long/short funds generate alpha – or value added – in three ways: stock selection, shorting, and market timing.  This is only partially true. Surprisingly, the largest source of alpha is factor tilts. Click here to register and access the full article, or contact us for additional information.  

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Some hedge funds are poised to make serious money off of Trump’s shocking win

Lots of people were surprised by Donald Trump’s victory in the US presidential election. But some hedge funds positioned themselves for this outcome — and might end up performing better than they did after Brexit. Click here to read the full article and view Andrew Beer’s quote in Business Insider today

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History is Repeating Itself with Trends in Smart Beta

(or, Why the Quality Factor Will Disappoint Investors) In this article in HFMweek, Beachhead’s managing member, Andrew Beer, talks about the quality factor and concludes that, rather than reflect a new risk premium, it is more likely the statistical validation of a long-term convergence of growth and value investment strategies.  As a result, returns going forward are likely to disappoint investors. HFMweek subscribers click here to access this article, or contact us for additional information.

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ETFs Offer Hedge Fund Returns, Without The Fees

The following interview with Andrew Beer appeared in the October, 2016 issue of ETF Report.  In this exchange, Beer explains how Beachhead evaluates long/short strategies and replicates hedge funds using ETFs. Introduction: While many hedge fund strategies can deliver great performance, sky-high management fees often eat into returns, poaching as much as 80% of alpha over the past 10 years, according to Beachhead Capital Management. ETFs offer an alluring alternative, allowing investors to copy hedge fund strategies without all the fees. Since 2012, Beachhead has been doing just that. The New York City-based firm uses liquid ETFs and other instruments …

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Should you ignore financial academic research?

Excerpted text from Andrew Beer’s article in Investment Europe today: Marketers like nothing more than to pitch a product “grounded in decades of academic research.”  The implication is that objective academics have dispassionately studied market phenomena to uncover canonical truths.  In theory, this makes the investment decision easy – think “value outperforms growth” or, more recently, “quality stocks outperform.” Don’t be fooled.  Academic papers are subject to five very serious limitations: 1.    Publishing Bias 2.    The Big Splash Phenomenon 3.    The Assumptions Are Everything 4.    The World Changes – A Lot 5.    Business and Academia Overlap Click here to read …

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