The document summarizes research on the future of hedge funds in institutional portfolios such as public pension funds and endowment funds. It finds that over the past decade, pensions and endowments increasingly allocated to alternative investments like hedge funds for diversification. While hedge funds performed well in the 2008 crisis, they have struggled in recent years to repeat that success. The research analyzes data showing that endowments steadily increased allocations to alternatives like hedge funds from 2004-2009, though the trend has plateaued since 2010. Pension funds also significantly increased hedge fund holdings over the past 5-10 years with no clear sign of reduction during or after the crisis.
Who Invests in Hedge Funds in My State?ManagedFunds
The Hedge Fund Investor Map takes publicly available data from both public and private pension plans, university endowments, and foundations in all 50 states to show what groups are investing in hedge funds. Public pensions such as the AFL-CIO, AFSCME, or Florida Retirement System, and corporate pensions like UPS, 3M, or John Deere all invest in hedge funds. In fact, public pension funds represent the largest portion of capital invested in hedge funds by institutional investors at over 22%.
The partnership between hedge funds and university and college endowments continues to grow. For many educational institutions, hedge funds are an important tool used to diversify their portfolios, manage risk and produce reliable returns. Hedge fund investments help these institutions fund financial aid, scholarships, operations, research, academics and athletic programs.
Distressed Debt Investing: Resources to Help Investors Better Understand The...ManagedFunds
"Distressed Debt Investing: Resources to Help Investors Better Understand Their Investment Options in this Asset Class" is aimed at helping investors better understand their investment options in the distressed debt space. The presentation gives an overview of distressed debt investment and the role these investors play in the bankruptcy process by creating liquidity in the credit markets, lowering the cost of lending, and helping companies that may be close to bankruptcy or in bankruptcy with additional capital.
Measuring Hedge Fund Performance: Investors Weigh InManagedFunds
Institutional investors partner with hedge funds to achieve specific, unique goals within their investment portfolios.
According to the Preqin data, key objectives most frequently cited by investors include:
-Returns that are uncorrelated to equity markets (ie. S&P 500)
-Absolute returns in all markets
-Dampening portfolio volatility and diversifying total portfolio
TORONTO – The Investment Funds Institute of Canada (IFIC) released a seminal report
– The Value of Advice: Report - which provides a clear, unbiased view of what advice means to
the financial well-being of Canadians and how it builds their confidence in their financial future.
Who Invests in Hedge Funds in My State?ManagedFunds
The Hedge Fund Investor Map takes publicly available data from both public and private pension plans, university endowments, and foundations in all 50 states to show what groups are investing in hedge funds. Public pensions such as the AFL-CIO, AFSCME, or Florida Retirement System, and corporate pensions like UPS, 3M, or John Deere all invest in hedge funds. In fact, public pension funds represent the largest portion of capital invested in hedge funds by institutional investors at over 22%.
The partnership between hedge funds and university and college endowments continues to grow. For many educational institutions, hedge funds are an important tool used to diversify their portfolios, manage risk and produce reliable returns. Hedge fund investments help these institutions fund financial aid, scholarships, operations, research, academics and athletic programs.
Distressed Debt Investing: Resources to Help Investors Better Understand The...ManagedFunds
"Distressed Debt Investing: Resources to Help Investors Better Understand Their Investment Options in this Asset Class" is aimed at helping investors better understand their investment options in the distressed debt space. The presentation gives an overview of distressed debt investment and the role these investors play in the bankruptcy process by creating liquidity in the credit markets, lowering the cost of lending, and helping companies that may be close to bankruptcy or in bankruptcy with additional capital.
Measuring Hedge Fund Performance: Investors Weigh InManagedFunds
Institutional investors partner with hedge funds to achieve specific, unique goals within their investment portfolios.
According to the Preqin data, key objectives most frequently cited by investors include:
-Returns that are uncorrelated to equity markets (ie. S&P 500)
-Absolute returns in all markets
-Dampening portfolio volatility and diversifying total portfolio
TORONTO – The Investment Funds Institute of Canada (IFIC) released a seminal report
– The Value of Advice: Report - which provides a clear, unbiased view of what advice means to
the financial well-being of Canadians and how it builds their confidence in their financial future.
Ashton Global Direct Lending
Ashton Global provides businesses with secured term loans for growth
Ashton Global can finance mezzanine and sale-leaseback transactions
A Primer on Distressed Debt Investing InfographicManagedFunds
A Primer on Distressed Debt Investing provides easy to understand visual depictions of how distressed debt investing works and explains how these investors often work alongside financially distressed companies to ensure a successful restructuring or bankruptcy proceeding. It also illustrates how distressed debt investments can help provide a number of positive results, including increased liquidity, a positive impact on overall company value, a higher degree of debt recovery, and relief of financial constraints.
Are Defined Contribution Plans Ready for Alternative Investments?Callan
Amid the growing popularity of the defined contribution (DC) model, the DC industry continues to look for ways to optimize performance.
The outperformance of defined benefit (DB) plans, and the increasing cross-pollination of DB and DC investment staff, has led some DC plans to take a closer look at alternative investments.
We examine three broad areas of alternative investments in relation to the DC market: real estate, hedge funds, and private equity.
Authors: Sally Haskins, Gary Robertson, Jimmy Veneruso
Question H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you hope to be able to play in this sector or industry in the medium term?
A Menu of Products for Investors and Lawyers (Series: Commercial Litigation F...Financial Poise
Litigation funding is an increasingly-popular tool for attorneys and clients to share the risk and reward of litigation with third-party investors, and for investors to capitalize on the uncorrelated returns generated by legal-driven revenue. However, the term "litigation-" or "legal-" funding actually encompasses a handful of products, which vary based on borrower profile, stage and sector of litigation, use of proceeds, and ultimately, cost of capital and risk-reward profile. This webinar examines three funding products -- case fundings, law firm loans, and portfolio fundings -- and aims to inform attorneys on best solutions for their firms and clients, and provide an overview for institutional investors looking to allocate capital to litigations.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/a-menu-of-products-for-investors-and-lawyers-2020/
Ambitious entrepreneurs need stimulating ecosystems. Dutch partners in regional economics (Ministry of Economic Affairs, Economic Board Utrecht, Utrecht University) now explore the Dutch entrepreneurial ecosystem. In that system venture capital of course is vital for ambitious entrepreneurs. Don Ginsel (Capital Waters) explains the Dutch situation.
World Economic Forum - Impact Investing, A Primer for Family Offices - 2014Shiv ognito
The goal of this report is to help family offices ask the right questions as they contemplate their path into impact investing. It is important to recognize that
impact investing may not suit all investors. There will be family offices which conclude impact investing is not appropriate at this stage for them.
The 1st rule in startup investing: How investors lower risk and boost returns...OurCrowd
Investing in startup companies is risky. Experienced angel investors know how to manage this risk.
This presentation -- given by OurCrowd's Zack Miller and David Stark -- explains where risk comes from investing in early stage companies and uses cutting-edge research to describe methods to lower risk, boosting investment returns as a result.
What kind of returns can you expect with -- and without -- diversification?
How to build a portfolio of startups
Other methods professional investors use to de-risk investing in early stage companies
Hedge funds originated as a vehicle to help diversify investment portfolios, manage risk and produce reliable returns over time. While hedge funds’ investor base has evolved over the years – from individuals to institutions such as pensions, universities and foundations – their core goals have not.
This presentation provides a brief overview of the investment approach hedge funds offer their partners.
It also illustrates the many ways hedge fund investments benefit communities and individuals.
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
Ashton Global Direct Lending
Ashton Global provides businesses with secured term loans for growth
Ashton Global can finance mezzanine and sale-leaseback transactions
A Primer on Distressed Debt Investing InfographicManagedFunds
A Primer on Distressed Debt Investing provides easy to understand visual depictions of how distressed debt investing works and explains how these investors often work alongside financially distressed companies to ensure a successful restructuring or bankruptcy proceeding. It also illustrates how distressed debt investments can help provide a number of positive results, including increased liquidity, a positive impact on overall company value, a higher degree of debt recovery, and relief of financial constraints.
Are Defined Contribution Plans Ready for Alternative Investments?Callan
Amid the growing popularity of the defined contribution (DC) model, the DC industry continues to look for ways to optimize performance.
The outperformance of defined benefit (DB) plans, and the increasing cross-pollination of DB and DC investment staff, has led some DC plans to take a closer look at alternative investments.
We examine three broad areas of alternative investments in relation to the DC market: real estate, hedge funds, and private equity.
Authors: Sally Haskins, Gary Robertson, Jimmy Veneruso
Question H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you hope to be able to play in this sector or industry in the medium term?
A Menu of Products for Investors and Lawyers (Series: Commercial Litigation F...Financial Poise
Litigation funding is an increasingly-popular tool for attorneys and clients to share the risk and reward of litigation with third-party investors, and for investors to capitalize on the uncorrelated returns generated by legal-driven revenue. However, the term "litigation-" or "legal-" funding actually encompasses a handful of products, which vary based on borrower profile, stage and sector of litigation, use of proceeds, and ultimately, cost of capital and risk-reward profile. This webinar examines three funding products -- case fundings, law firm loans, and portfolio fundings -- and aims to inform attorneys on best solutions for their firms and clients, and provide an overview for institutional investors looking to allocate capital to litigations.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/a-menu-of-products-for-investors-and-lawyers-2020/
Ambitious entrepreneurs need stimulating ecosystems. Dutch partners in regional economics (Ministry of Economic Affairs, Economic Board Utrecht, Utrecht University) now explore the Dutch entrepreneurial ecosystem. In that system venture capital of course is vital for ambitious entrepreneurs. Don Ginsel (Capital Waters) explains the Dutch situation.
World Economic Forum - Impact Investing, A Primer for Family Offices - 2014Shiv ognito
The goal of this report is to help family offices ask the right questions as they contemplate their path into impact investing. It is important to recognize that
impact investing may not suit all investors. There will be family offices which conclude impact investing is not appropriate at this stage for them.
The 1st rule in startup investing: How investors lower risk and boost returns...OurCrowd
Investing in startup companies is risky. Experienced angel investors know how to manage this risk.
This presentation -- given by OurCrowd's Zack Miller and David Stark -- explains where risk comes from investing in early stage companies and uses cutting-edge research to describe methods to lower risk, boosting investment returns as a result.
What kind of returns can you expect with -- and without -- diversification?
How to build a portfolio of startups
Other methods professional investors use to de-risk investing in early stage companies
Hedge funds originated as a vehicle to help diversify investment portfolios, manage risk and produce reliable returns over time. While hedge funds’ investor base has evolved over the years – from individuals to institutions such as pensions, universities and foundations – their core goals have not.
This presentation provides a brief overview of the investment approach hedge funds offer their partners.
It also illustrates the many ways hedge fund investments benefit communities and individuals.
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
All papers submitted to IJMRR are subject to a double-blind peer review process. The journal publishes original works with practical significance and academic value. Authors are invited to submit theoretical or empirical papers in all aspects of management, including strategy, human resources, marketing, operations, technology, information systems, finance and accounting, business economics, and public sector management. IJMRR is an international forum for research that advances the theory and practice of management.
The Mutual Fund Concept1. LG 12. LG 2Questions of which stoc.docxdennisa15
The Mutual Fund Concept
1. LG 1
2. LG 2
Questions of which stock or bond to select, how best to build a diversified portfolio, and how to manage the costs of building a portfolio have challenged investors for as long as there have been organized securities markets. These concerns lie at the very heart of the mutual fund concept and in large part explain the growth that mutual funds have experienced. Many investors lack the know-how, time, or commitment to manage their own portfolios. Furthermore, many investors do not have sufficient funds to create a well-diversified portfolio, so instead they turn to professional money managers and allow them to decide which securities to buy and sell. More often than not, when investors look for professional help, they look to mutual funds.
Basically, a mutual fund (also called an investment company) is a type of financial services organization that receives money from a group of investors and then uses those funds to purchase a portfolio of securities. When investors send money to a mutual fund, they receive shares in the fund and become part owners of a portfolio of securities. That is, the investment company builds and manages a portfolio of securities and sells ownership interests—shares—in that portfolio through a vehicle known as a mutual fund.
An Advisor’s Perspective
Catherine Censullo Founder, CMC Wealth Management
“Mutual funds are pools of assets.”
MyFinanceLab
Portfolio management deals with both asset allocation and security selection decisions. By investing in mutual funds, investors delegate some, if not all, of the security selection decisions to professional money managers. As a result, investors can concentrate on key asset allocation decisions—which, of course, play a vital role in determining long-term portfolio returns. Indeed, it’s for this reason that many investors consider mutual funds the ultimate asset allocation vehicle. All that investors have to do is decide in which fund they want to invest—and then let the professional money managers at the mutual funds do the rest.
An Overview of Mutual Funds
Mutual funds have been a part of the investment landscape in the United States for 91 years. The first one started in Boston in 1924 and is still in business. By 1940 the number of mutual funds had grown to 68, and by 2015 there were more than 9,300 of them. To put that number in perspective, there are more mutual funds in existence today than there are stocks listed on all the major U.S. stock exchanges combined. As the number of fund offerings has increased, so have the assets managed by these funds, rising from about $135 billion in 1980 to $15.8 trillion by the end of 2014. Compared to less than 6% in 1980, 43% of U.S. households (90 million people) owned mutual funds in 2014. The mutual fund industry has grown so much, in fact, that it is now the largest financial intermediary in this country—even ahead of banks.
Mutual funds are big business in the United States and, indeed, all.
Need to know more about private equity and hedge funds? Then you have come to the right place with this quick overview presentation. This is based on my book: "Figuring Out Wall Street". A part of a continuing series of on the financial services industry. We provide training, custom developed to your needs. Contact us to discuss your needs and get a quote.
As cryptoassets enter the mainstream, index funds are increasingly presenting both retail and institutional investors with the opportunity to gain exposure to the cryptoasset market. In this space, index funds are now being employed to track the activity and performance of specific cryptocurrencies or basket of cryptocurrencies to meet a variety of risk and return objectives of different client types.
As cryptoassets enter the mainstream, index funds are increasingly presenting both retail and institutional investors with the opportunity to gain exposure to the cryptoasset market. In this space, index funds are now being employed to track the activity and performance of specific cryptocurrencies or basket of cryptocurrencies to meet a variety of risk and return objectives of different client types.
Investment products vary in risk, return and duration. So do investor objectives. Successfully matching financial instruments with financial plans takes skill, know how and ability.
FIN350007VA016-1196-001 - FINANCIAL MARKETS AND INSTITUTWe.docxlmelaine
FIN350007VA016-1196-001 - FINANCIAL MARKETS AND INSTITUT
Week 8 Assignment 2 Submission
Robert DeVos
on Sun, Aug 25 2019, 6:01 PM
39% highest match
Submission ID: c1318944-ee14-4dad-b417-1a747f07a3e6
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FIN350 Week 8.docx
Assignment 2: 1 FINANCIAL MARKETS AND INSTITUTIONS
Robert DeVos
Strayer University
FIN350 Financial Markets and Institution
Dr. Shaw
August 25, 2019
Financial securities also known as financial assets or financial instruments is a generic
term that tends to describe bonds, stocks, money market securities such as treasury bills
among other instruments that represents the right to receive benefits in the future under a
set of mentioned conditions. According to Lynch (2009), financial securities represent a
safer method for one to raise funds and ensuring the investors receives their returns at the
(http://safeassign.blackboard.com/)
FIN350 Week 8.docx
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same time. Further, it is a way that tends to provide a platform where there is openness
between the buyers and sellers of the securities. As such, this helps to motivate both
buyers and seller to participate in the market activities thereby enabling the creation of
economic wealth in the country. Besides, financial markets often lead to mobilization of
capital in large amounts which are then utilized in various types of institutions within the
United States. Generally, the financial markets in the United States typically represent a
major contributor towards the nation’s growth in terms of economy.
The financial markets in the United States allow the government to acquire funds that are
then utilized in financing other significant projects within the nation. 2 DUE TO
FINANCIAL MARKETS AVAILABILITY, THE GOVERNMENT IS ABLE TO
BORROW FROM THE GENERAL PUBLIC THE CAPITAL WHICH IS OFTEN
IN FORM OF BONDS TO FUND AND INITIATE SOME OF IT SIGNIFICANT
PROJECTS SUCH AS INFRASTRUCTURES DEVELOPMENT LIKE THE
PUBLIC HOSPITALS ACROSS THE UNITED STATES (IOANNOU, 2015).
Moreover, the financial markets tend to play an important role to the United States
education system since through it; the students are able to acquire funds in form of loans
to support their curriculum activities in a much easier way.
Saving of funds is another major contribution that the financial markets tend to play in
the United States’ economy. In essence, the financial markets in the country helps ...
Hedge funds offer qualified investors a unique partnership. While hedge funds first began as a way to offer investors a balanced – or market-neutral – approach to investing, the methods have evolved through the years. This presentation focuses on one of those strategies, credit funds.
21st Century Strategies for Financial InclusionJon Gosier
The wealth of black american households was decimated in 2008. This white paper outlines a strategy on how to structure new instruments for investment for black americans and other minority communities.
3.
Data
As briefly mentioned above, our data are the following:
1. Public pension funds database (PPD, henceforth) : 150 state and local public pension
3
plans and annual data for 20012012.
2. NACUBO public aggregate data of endowment funds
4
3. News articles
Center for Retirement Research at Boston College utilized the annual financial reports of
individual funds to compile PPD. When they did, they used the label used in the report and did
not make any modification to the asset class labels. For instance, the hedge fund allocation and
absolute return allocation were treated as different variables in PPD, so we had to merge the two
variables. Also, in case that the asset allocations did not add up to 1, we had to go back and
doublecheck on those funds’ reports.
NACUBO stands for National Association of College and University Business Officers
(NACUBO), a membership organization representing more than 2500 universities across the
country and around the world. Its mission is to advance the economic and financial practices of
universities so that it ultimately benefits the academic objectives. The NACUBO aggregate data
on 700800 US colleges were reported on annual basis. First, we compiled all the annual data
from 20042013 into one data set to perform analysis of data over time. Unfortunately, the
individual funds data were by paid subscription only, but we were able to look up most annual
reports of the top 20 endowment funds in the rankings, such as Harvard, Yale, and University of
Texas system . However, we mainly use aggregate data for our analysis because each
5
endowment fund had different ways of classifying asset classes when they reported portfolio
allocation, so lack of standardized reports of individual funds motivated us to rely mostly on
aggregate data.
Endowment Funds
The average annual returns of endowment funds are given in the Table 1 below. It shows
that in 2008 and 2009, endowments suffered loss, especially a big loss of 17% on average in
2009. However, compared to the market performance (S&P 500 returned 26.2% in 2009 and
13.1% in 2008), endowment funds fared better. We used the public data provided by NACUBO
3
Public Plans Database. 20012010. Center for Retirement Research at Boston College and Center for State and Local
Government Excellence.
4
http://www.nacubo.org/Research/NACUBO-Commonfund_Study_of_Endowments/Public_NCSE_Tables.html
5
http://www.bc.edu/offices/endowment/top50endowments.html
12. honestly a bit naïve.
Impact of Volcker Rule on Hedge Fund Investments
7
Another big story out of the hedge fund industry came straight from Wall Street.
Goldman Sachs is preparing to sell $285 million of their hedge fund holdings in the third quarter
of this year, continuing their massive selloff this year. The reason behind this move is because
of the creation of the DoddFrank act in 2010 following the financial crisis. Inside of this act is a
part called the Volcker Rule. The Volcker Rule bars banks from numerous types of investing and
trading with their own money, which has historically yielded tremendous returns for firms like
Goldman Sachs. The deadline to divest in these funds is July 2015.
Along with divesting in hedge funds, Goldman and other major banks began closing their
proprietary trading desks, which were part of the problem in the 2008 financial crisis. These prop
trading desks were involved in investing in hedge funds using the bank’s money, some of which
were operated by the bank themselves such as Goldman’s hedge funds. Now, the Volcker Rule
prohibits banks from supplying more than 3 percent of the money for its own hedge funds.
So far this year, Goldman Sachs has sold $2.55 billion it had in hedge funds and has
plans to get rid of $375 million more in the coming months. In total, Goldman has about $11.4
billion in funds that are subject to the Volcker Rule, with some of the remaining funds relatively
illiquid and hard to unload. This means banks may face major losses on illiquid investments in
funds subject to the Volcker Rule as they are hard to sell and may require them to be sold for
under fair market value.
As the Volcker Rule applies to all major banks and investment firms, we may see a major
pullback in hedge fund investments over the next year. Other banks like JPMorgan Chase, Credit
Suisse, Citi Group, Morgan Stanley, Bank of America Merrill Lynch, and others are in a similar
position as Goldman Sachs. While these banks will be able to retain a large amount of their
hedge fund investments, the minor pullback across the entire industry may stunt the growth of
the hedge fund industry as a whole. Many of these investments are illiquid and difficult to sell,
so both the banks and hedge funds could see losses. But what does this do to the longterm
success of the hedge fund industry.
After analyzing what the result of banks divesting some of their hedge fund holdings
would be, it seems apparent that hedge funds will need to source new investors to survive. The
large Wall Street investment banks are major clients for hedge funds, and while not all of their
investments need to be sold off, there is a significant amount of investments up for grabs. Hedge
funds, along with help from the banks who are selling, need to find new investors to pick up the
slack. This may be a major benefit to the hedge funds if they are able to further diversify their
7
http://dealbook.nytimes.com/2014/11/05/goldman-sachs-sells-285-million-in-hedge-fund-holdings/