PMs Try to Bust Alts Myths
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Thursday, December 6, 2012

PMs Try to Bust Alts Myths

Declaring that alternative investments are a misunderstood but increasingly important asset category, a panel of portfolio managers tried to bring the love of alts to a group of financial journalists assembled today at the Omni Berkshire Place Hotel in Manhattan.

The event, 2012 Alternative Investments Roundtable, featured Frederick Lake, portfolio manager of the ASTON/Lake Partners LASSO Alternatives Fund, Edward Egilinsky, managing director of alternative investments at Direxion [profile], Jeremy Radcliffe, co-founder and managing director of Salient Partners, and Linda York, director of syndicated research, Cogent Research.

The guests included roughly 20 New York financial journalists.

Lake addressed one frequently discussed topic: the definition of an alt investment. He outlined a simple set of rules for determining whether an investment could fit this category -- for example, does the investment short or hedge, using some kind of instrument to capitalize on upside or downside movement? Also, does it use instruments or securities other than stocks or bonds?

The panelists discussed advisors' appetite for alts, which they said was growing as more investors seek strategies for handling volatility and low yields. However, they all agreed that more education is needed to help advisors better present the case for this category to their clients.

Going forward, Lake said that long/short strategies, particularly in equities, could become more appealing to investors. He also expects that there would be opportunities for distressed assets, including debt.

Meanwhile, Radcliffe expected there'd be a resurgence of interest in trend, managed futures and momentum strategies. Interest will also likely grow in commodities and strategies that address volatility.

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