Some highlights from Monday’s FTfm.
Few FoHFs yield value
As yet unpublished academic research has found that only about 5% of funds of hedge funds deliver value and investors would do just as well by randomly picking a basket of underlying hedge funds
Kiid rules causing hold up in new funds
At least one major UK execution-only broker has barred new funds from its platform due to Kiid compliance problems. Since July, all new funds launched in the EU have had to be accompanied by a key investor information document (Kiid)
Funds flee offshore to evade ‘bad’ regulation
Private equity funds in the UK are moving offshore ahead of Europe-wide regulation that will come into force in 2013
Big beasts’ market-making migration
Research shows triple B corporate bond yields move closely with the preceding three months’ stock volatility. That suggests corporate bond prices will have moved up rapidly by early next year, but the market making will increasingly be done with small pools of private capital. John Dizard sees an opportunity
Investors gloomy on market-cap
Research from Edhec-Risk Institute suggests big investors would prefer to take stakes in alternative indices such as equal-weighted ones, rather than market-cap weighted, but are doing very little about it
Irrational regard for economic models
The award of the ‘economics Nobel prize’ has many times appeared to be a spoof. The latest continues to amuse having been given to an economist who specialises in economic models based on rational expectation – a theory that has turned out to be untrue and deeply damaging, according to James Mackintosh
Industry chiefs admit they are stumped
A 10-strong group of CIOs called the 300 Club launched last week and admitted for the first time in public that they do not know as much as they have said they do. So what are we paying them for and where do we go from here, asks Pauline Skypala