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John Delano

The Sustainability Conundrum

Posted by Deborah Spalding, Mark J.P. Anson, John Delano, Kristofer Kwait on Feb 12, 2020

Topic: Responsible Investing

Sustainable investing, sometimes called environmental, social, and governance (ESG) investing, has been a hotly contested topic for decades, an the debate continues with both supporters and naysayers drawing battle lines across the social divide. Do ESG intitiatives add value to an investment portfolio? Subtract from it? Are they neutral, but with the potential to be valuable?

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Investment Manager Fees: Out of Sight, Out of Mind

Posted by John Delano, Kristofer Kwait on May 22, 2019

Topic: Industry Knowledge

One of the most pressing questions facing fiduciaries is that of investment management fees. We think it is a healthy and necessary discussion...

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Active Management Fatigue and What to Do About It

Posted by John Delano, Jess Gaspar, Kristofer Kwait on Jun 14, 2016

Topic: Asset Allocation | Investment Strategy

Active management has struggled for several years, raising questions about whether active management can ever outperform again. Traditional active manager style tilts, like value and size, have detracted from performance in recent periods. Over the long run, these tilts tend to mean revert around positive trends, creating reasons to be optimistic about active management’s prospects. On the other hand, only 30 percent of managers truly deliver positive alpha after controlling for typical active management style tilts.

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Hedge Funds:
How Many (or Few) Does it Take?

Posted by John Delano, Kristofer Kwait on Apr 8, 2016

Topic: Hedge Funds

Hedge Funds: How Many (or Few) Does it Take? It’s straightforward to get an answer to that question, at least superficially: draw at random from a manager universe, build hypothetical portfolios with the selected managers, track performance, repeat thousands of times, and based on the average result, arrive at an optimal portfolio size.

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Size: It’s Complicated

Posted by John Delano, Kristofer Kwait on Jan 14, 2016

Topic: Hedge Funds | Investment Strategy

AUM among hedge funds has always been characteristically top-heavy, with the majority of capital in the hands of a relatively small number of managers. While the hedge fund universe has expanded from a few hundred in the mid-1990s to several thousand today, investors have voted in large numbers for what amounts to a handful of those managers.

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Smart money, crowded trades?

Posted by John Delano, Kristofer Kwait on Aug 17, 2014

Topic: Hedge Funds | Industry Knowledge

Approaches to stock selection vary widely across the hedge fund universe, even among managers practicing the same strategy. Valuation, potential catalysts, time horizons and technical factors based on price history all influence decisions to own a stock, both in terms of names and position sizing and hedging. A name that is attractive to one manager may leave another unmoved, or escape consideration altogether.

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Chasing Winners: The Appeal and the Risk

Posted by John Delano, Kristofer Kwait on Aug 6, 2014

Topic: Asset Allocation | Hedge Funds | Investment Strategy

For investors selecting managers to hire, the draw of managers that have produced outsized recent winners can be powerful. While such a strategy can work in the long-term, this strategy is implicitly based on the manager’s ability to track market movements across investment environments.