This article was originally published on Financial Standard on the 25th of January 2016.
With higher fees, lower liquidity and ever-transforming risk profiles, traditional hedge fund strategies are attractive to only a handful of institutional investors.
But with fixed income markets serving up negative real returns, the retail market is crying out for sophisticated strategies that behave differently to their core equity allocations but without the complexity and high fees associated with hedge funds. Alternative beta offers the right combination of high risk-adjusted return and non-correlation at a price point and liquidity level the retail market can stomach. What’s more, fund managers offering this new breed of strategy will not be held back by capacity, which means alternative beta is not only great for investors, it’s great for business too. Mark Smith reports.