News and Media

A Hedge Fund Manager’s View on Liquid Alternatives

Included below is an excerpt of Andrew Beer’s article in There’s something amiss in the liquid alts space. After years of stellar growth, adoption of liquid alternatives at wirehouses ground to a halt last year, according to a recent study by the Money Management Institute and Dover Financial Research called Distribution of Alternative Investments through Wirehouses (2016). Consequently, despite growing risks in 60/40 portfolios, most retail investors are significantly underinvested relative to target allocations. On top of this, some big players that were early adopters of liquid alternatives are rethinking that move strategically. “Generation one” of liquid alts had …

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Institutional Investor: A Hedge Fund Adviser’s Open Letter to Pension Trustees

Included below is an excerpt of Andrew Beer’s article published on June 20, 2016: It’s hard to pick up a financial newspaper these days without seeing some sort of piece on a purported hedge fund disaster.  There are a number of reasons, I surmise, that this is the case: The “rich guy gets hammered” trope sells papers.  For every fund down 20 percent, a different one is up 20 percent.  There’s a cottage industry of people who run around trying to find the next calamity. High fees − justifiably − lead to high expectations. When you pay 2-and-20, you should …

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Financial Times: The Hedge Fund Fee Structure Consumes 80% of Alpha

Investors bear the risks and managers reap the rewards, says Beachhead’s Andrew Beer. The average hedge fund earns 1.67 per cent in management fees and is paid 18 per cent of investment profits annually. Over the past ten years, investors paid away half of pre-fee returns. Even more troubling is the fact that fees consumed 80 per cent of alpha, the active return on an investment. Yes, the industry still generates a lot of alpha, but it goes to the managers, not investors. How did we end up in a world where investors bear the risks and managers reap the …

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