The Quest for Useful Risks: Intro to Alternative Risk Premia
In this video, Alec Litowitz, Magnetar’s founder and CEO, describes how the hedge fund industry, which has often failed to deliver on its original mandate of delivering diversifying return streams, is being disrupted. Alec details a new lens for understanding return decomposition: strategy premia, or return streams derived from specific hedge fund strategies that are extractable via a targeted systematic approach. Strategy premia delivers on the original diversification mandate. It is distinct from style factors like value, size and momentum, and alternative to traditional stock and bond risk. Alec declares that what “style” did to the democratization of mutual funds, “strategy” can do for the accessibility of hedge fund
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