Activity in the secondary markets for asset-backed securities has increased significantly over the past month, a representative for Beacon Capital Markets told Opalesque. The New York-based firm offers clients an electronic platform for the buying and selling of mortgage backed and asset backed securities, and announced the expansion of its senior team with two new hires in anticipation of further growth in these markets. It counts hedge funds amongst its active clients and has seen an increase in interest from managers as the platform recently expanded to include non-agency MBS, ABS and CMBS.

David Weisberger, founder of Watch Hill Investment Partners will join the team as Co-CEO alongside Beacon founder Norman Epstein. Weisberger grew Watch Hill to $1bln in assets and returned annualized profits of approximately 20% over a decade.

The firm also announced the addition of John Knox, formerly of Bear Stearns & Co, who joins Beacon as Managing Director of Sales and Marketing.

Hedge funds, which make up a portion of Beacon’s client base have had large success in asset-backed investing through 2008, returning +15.21% YTD compared to losses of 3.42% in 2008 (according to HFRI).

For full article go here: http://www.opalesque.com/54674/Asset_backed_securities_trading_increases_on674.html

Our panel:

Aaron Kaufman, President of Overnight Films: In his previous position, he served as a principal at Barbarian Films, LLC. He was vice president of Spackman Group a private equity firm based in Hong Kong which specialized in media investments. He began his career in film finance working as SVP of business development for Chris Blackwell’s Palm Pictures Group.
Luc Toutounghi has more than 25 years experience in the international financial services industry, operating from Switzerland and the UK. Companies worked for include Merrill Lynch, Nomura, Nikko and Yamaichi. In the last few years Luc has specialized in film finance, leading the Kreis Group’s Swiss film finance and production company Archangel SA. He was one of the Executive Producers of the 2008 Oscar Winning short animation film Peter & the Wolf in association with Archangel SA.
Steve Morales is Executive Director at the Franklins Springs Family Media Fund. Franklin Springs is a fully-integrated film production studio with the in-house capability for script writing, HD cinematography, post-production editing, DVD authoring, distribution and fulfilment.
How sustainable has performance been in the wake of for instance:

• “ … The last-minute demise of a prestige picture is a rare spectacle in Hollywood – one that is painful, expensive and damaging to all involved. … But such disasters may become more common as an increasingly nervous film business comes to terms with a sharp decline in home video revenue and with the diminishing leverage of even the most popular A-list stars, like Mr.Pitt.” (New York Times: “Money Worries Kill A-List Film at Last Minute”)
• In your view is this a one off episode? Or the likelihood “… such disasters may become more common… “ – why or why not?
• Is it harder to raise cash for film financing as a strategy?
• Are certain sectors more affected than others – which would they be and why?
• Has the recession scaled back the number of films being made? From whom and how is cash currently being raised? Risk premia that are being charged for the same
• Do you believe that hedge funds have and will play an important role in film/entertainment financing?
• Investor concerns and how they are being dealt with?

For downloading the research go here: http://www.opalesque.com/asquare/597/A_SQUARE_Special_FilmEntertainment_led_financing_webinar_download597.html

Opalesque has announced the findings of a recent survey on investors’ use of alternative alternatives. Opalesque is the publisher of A SQUARE (see here for details), the first web-based independent research platform dedicated exclusively to alternative alternatives .

Respondents to the survey represent a global, diversified base of reputed senior decision makers – asset allocators and financial market investors. Although biased some what by the participation of financial advisors/ consultants/ wealth managers, institutions, hedge fund /fund of fund providers, the views of pension plans, endowments, family offices and high net-worth individuals are meaningfully represented. The survey’s salient findings are:

• Risk diversification
  95.3% of the survey participants associated “alternative alternatives” (defined as non-traditional and non-main stream hedged fund strategies) with risk diversification, followed by de-correlation (86%). 
• Timber, Forest linked investing (TIMOs, REITs) topped in being classified as an alternative alternative
  72.1% selected Timber, Forest linked investing; followed by 65.1% each for Litigation and Entertainment led investing 
• Real estate, Asset based lending and Currencies received the highest scores when asked about the portfolio allocation in 2008:
  45% of the respondents allocated to real estate of which 20% allocated 50% to 20% and 25% allocating 10% or under 
• Investors found that their allocation to the following alternative alternatives outperformed stock and bond allocations over 2008 – Q1 2009. 

http://www.opalesque.com/53669/Opalesque_survey_on_Alternative_Alternatives_finds_investors669.html

Opalesque A SQUARE = Alternative Alternatives is the first web publication, globally, that is dedicated exclusively to alternative investments. A SQUARE’s weekly selection feature unique investment opportunities that bear virtually no correlation to the main stream hedge fund strategies and/or distinguish themselves by virtue of their “alternative” motive – social, behavioural, natural resources, sustainable /environment related investing.

With its “research that reveals” approach, fast facts and investment oriented analysis, A SQUARE offers diversification and complementary ideas for: private, high net-worth and institutional investors, pension funds and endowments, portfolio and hedge funds managers. For more information please go here:  http://www.opalesque.com/index9.html

As pioneers in the field of alternative alternatives, Opalesque “A SQUARE” had announced a survey that has been designed to understand

* How investors perceive alternative alternatives?

* Who and how much is being allocated to them?

 * How alternative alternatives have performed through this historic financial crisis? and,

 * Going forward the role they are likely to assume in portfolio allocation.

Insights of the survey are as follows:

• Ø Virtually all the survey participants assosiate alt alt investment with risk diversification, followed by de-corelation.

 Timber, Forest linked investing (TIMOs, REITs) topped in being classified as alternative alternative followed by Litigation  and Entertainment led investing.

For full article go here:

http://www.opalesque.com/ASQUARE/THIRD/Issue%20114_A%20SQUARE%20SPECIAL.pdf

 Peter Gruber, Research Associate at the Università dalla Svizzera Italiana in Lugano will be the third panelist at this Opalesque A SQUARE Interactive on Thursday July 16th 9 am EST / 15h Swiss time

Peter studied particle physics at the University of Technology, Vienna, from which he obtained a PhD in 2001. He worked for four years at CERN in Geneva on a future “Neutrino Factory”, first during this PhD thesis and subsequently as a CERN fellow. He then switched careers and obtained an master’s degree in quantitative economics from the Univeristy of St. Gallen. He currently works as a research associate at the Università dalla Svizzera Italiana in Lugano and teaches quantitative finance in St. Gallen. His research interests include the role of various risk factors, especially in option pricing.

Click here for all details, registration for this A SQUARE Interactive: http://www.opalesque.com/NextWebinar.html

A SQUARE Interactive has been designed as an interactive forum to address and discuss the topical issues relevant to alternative alternative investing and is an extended service to Opalesque’s A SQUARE (Alternative Alternatives) research platform. Opalesque’s A SQUARE is read by the world’s largest asset owners like sovereign wealth and pension funds, sophisticated high and ultra networth individuals, and leading consultants, advisors and allocators.

 A SQUARE (Alternative Alternatives) is still the first and only web-based independent research platform dedicated exclusively to alternative alternatives, having published 114 issues with a total of 481 research files up to today.

 Refer to the A SQUARE archive for an overview on the research topics: http://www.opalesque.com/index.php?act=archiveA2&formsearchorder=category.

 Forestry investing is becoming more popular and more accessible for the average individual investor. At one time (early 90’s) , direct investment was the most common option and so inevitably the smaller investor tended to be somewhat marginalised. Now they can choose from unit trusts, investment trusts, exchange-traded fund (ETFs) etc.

Growing Returns

 According to the IPD UK Property Index, 2007 (the most recent year for which figures are available) was an exceptionally strong year of performance for UK forestry; where the average total return was 31.6 per cent, up from 20.6 per cent in 2006 and double the 14.4 per cent total return in 2005.

 In 2007, the annualised three-year return was 22.0 per cent per annum and the five-year annualised return was 15 per cent. At this point, the 15-year annualised return since the start of the index in 1992 was 5.1 per cent per annum.

 The 31.6 per cent return meant forestry investments outperformed equities, Gilts and commercial property, and for the first time since the inception of the index in 1992, it had also outperformed all three of the other asset classes over the three-year period to 2007 (outperforming gilts and commercial property over the five-year period as well).

Forestry is a compelling investment opportunity for a many different groups of investors: from those looking simply for profits or a hedge against equity investments to those looking for an environmentally sound home for their money. Its proponents argue that in forestry they can find all three.

Global reach

Another key aspect of these funds is that they invest on an international basis, drawing on the expertise of specialist advisers. An eg. of this is Silva Tree, a company that is engaged in conservation, re-forestation and renewable energy projects in Costa Rica. These include: The Carbon Offset Reforestation Project, which helps to conserve and replace the Costa Rican rainforest by purchasing rainforest plots from private owners.

Forestry investments are a specialist area and this is true when dealing with projects in developing economies. The Director of Oxigen Investments, which specialises in the production of tropical hardwoods, such as teak and agarwood, from its own commercial sustainable plantations, points out: ‘”Despite the volatility in the stock markets, timber prices have remained extremely stable. Shares go up and down, but trees keep on growing.’

He adds, ‘Even if timber prices should weaken, tree owners can simply let them grow and in so doing they would be storing value on the stump … till prices recover. Thus timber is a fantastic “set it and forget it” investment. There is also a growing demand from socially conscious investors to see their money grow while also being able to contribute toward reducing global warming.’

Tax incentives and diversification

Forestry also offers tax incentives for investors, particularly for capital gains tax purposes (in UK) – the increase in the value of timber is exempt from CGT(Capital Gain Tax). While any increase in the net value of the land on which the trees are growing can be assessed, land value currently only accounts for approximately 15 per cent of the value of mature woodland.

Water scarcity has been on scientists’ minds and humanitarian organisations’ agendas for some time, but it seems that despite some daunting figures, the alarm bells are just not loud enough.

Global Water Resources
About 70% of the earth’s surface is covered in water, but 97% of it is saltwater, which is unfit for human use. Saltwater cannot be used for drinking, crop irrigation or most industrial uses. Of the remaining 3% of the world’s water resources, only about 1% is readily available for human consumption.

Global Shortage
Rapid industrialization and increasing agricultural use have contributed to worldwide water shortages. Areas that have experienced water shortages include China, Egypt, India, Israel, Pakistan, Mexico, parts of Africa and the United States (Colorado, California, Las Vegas and the East Coast), to name but a few.

Pollution also highlights the need for clean water. In the U.S., the dead zone off the Gulf Coast highlights the impact of fertilizer runoff, and methyl tertiary butyl ether (MTBE), an additive in unleaded gasoline, can be found in well water from California to Maryland. Overseas, highly publicized incidents in Russia, China and elsewhere demonstrate that pollution isn’t limited to the West. Of course, fouled water supplies further limit the amount of fresh water available for human use.

Indexes
Like any other scarcity, the water shortage creates investment opportunities, and interest in water is at an all-time high. Here are some of the more popular indexes designed to track various water-related investment opportunities:

• Palisades Water Index – This index was designed to track the performance of companies involved in the global water industry, including pump and filter manufacturers, water utilities and irrigation equipment manufacturers. The ticker symbol for the Palisades Water Index is ZWI. The index was set at 1000 as of December 31, 2003. It closed at 1351.08 on December 30, 2005.
• Dow Jones U.S. Water Index – Composed of approximately 23 stocks, this barometer climbed from 500 to 800 over the 12 months ending December 31, 2005. The ticker for the Dow Jones Water Index is DJUSWU.
• ISE-B&S Water Index – Launched in January 2006, this new index represents water distribution, water filtration, flow technology and other companies that specialize in water-related solutions. It contains 20 stocks. The ticker for the ISE-B&S Water Index is HHO.
• S&P 1500 Water Utilities Index – A sub-sector of the Standard & Poor’s 1500 Utilities Index, this index is composed of just two companies, American States Water (ticker: AWR) and Aqua America (ticker: WTR). In 2005, the S&P 1500 Water Utilities Index rose in excess of 45% .

Although not necessarily believing that the world will go to war for water, some think that we might witness the phenomenon of water refugees as soon as in the next 15 years, due to droughts and glacier retreats. According to the United Nations, about 50% of the world population will live in water-stressed conditions in the next 15 years.

Furthermore, the very nature of water makes finding a solution harder. Water is not fungible – unlike oil or other natural resources: it is not easily or economically transportable – it costs more to transport water than oil, the latter being heavier than the former; freshwater availability has been altered by climate change; and, finally, water is essential not only to human life, but also to pretty much all human activity, including agriculture and industry.

Recent years have seen an upswing in the demand for investments that seek to profit from the need for fresh, clean water. If the trend continues, and by all indications it will, investors can expect to see a host of new investments that provide exposure to this precious commodity and to the firms that deliver it to the marketplace. There are currently numerous ways to add water exposure to your portfolio – most simply require a bit of research.

Source: Investopedia

The results of a recent survey by JPMorgan Asset Management, which examined the investment strategies and practices of some of the nation’s largest institutional investors, confirms that alternative investment strategies — now established components of institutional portfolios — are no longer “alternative” at all. In fact, there has been no overall pullback from them even during recent challenging market conditions.

The JPMorgan Asset Management Next Generation Alternative Investing Survey examined the investment practices of 191 of the largest U.S. institutional investors across corporate plans, public funds and endowments and foundations representing $1.26 trillion in assets. The survey was conducted by Greenwich Associates in the first quarter of 2008.

Key Findings:

Alternative or essential?

Alternatives have become an essential part of portfolio strategies for institutional investors employing them. Growth expectations remain strong — despite current market disruptions, dislocations, and sub-prime contagion.

– Average allocations to alternatives exceed 18% and are expected to exceed 22% by 2010 — an increase of over 20%.

– A 20% to 30% allocation to alternatives is seen as “about right” overall, although among just E&Fs, more than half think this should be higher.

– A pervasive need to enhance and diversify returns drives growth, with a shift in allocations away from traditional assets toward alternatives.

Sizing up strategies

Growth in average allocations is expected across all major alternative asset classes, with absolute return/hedge funds and private equity growing the fastest.

– Hedge funds/absolute return: We estimate that these strategies will account for approximately 40% of net inflows into alternatives through 2010.

– Private equity: Growth will be strong, led by 62% of current investors planning to increase allocations, the highest percentage across all alternative asset classes.

– Real assets/real estate: This mainstream portfolio component will experience more modest growth.

Diversification within alternatives

Investors are emphasizing diversification within their alternative portfolios — among various established and new types of alternative strategies, as well as across geographic regions.

– Real assets/infrastructure: We expect to see its relatively small investor base more than double over the next three years.

– Green/sustainable: Even with a small current investor base, this emerging asset class showed surprising strength and is of particular interest to public funds.

– Geographic diversification: Among all alternative asset classes, real estate features the most pronounced preference for non-U.S. assets.

Investor dynamics

Although all institutional investors share a common need for return enhancement and diversification, the growth dynamics of alternatives play out differently in each investor segment, due to unique issues and concerns.

– Corporate plans: Given recent and anticipated regulatory and accounting changes, corporate plans are focused on controlling funded status volatility — increasing fixed income allocations and significantly extending durations. These plans have the lowest average total alternative allocations (13%), anticipated to grow to 15% by 2010.

– Public funds: With a focus on consistently earning required returns to meet their long-term benefit obligations, and not subject to the changing regulatory and accounting environment of corporate plans, public funds are currently more active in alternatives than their corporate counterparts. In fact, their participation rate with respect to absolute return/hedge funds has increased approximately four-fold (to 43% of plans invested) since our survey in 2004. These investors also show strong growth in private equity and green/sustainable investing.

– Endowments and foundations: This group of investors is clearly leading the way in alternative investing with allocations accounting for over a third of portfolio assets by 2010.

Alternatives meeting expectations but not without concerns

– For the vast majority of investors surveyed, alternative investments are currently meeting performance expectations.

– Investors’ greatest concerns are falling returns/performance for alternatives, liquidity concerns, and overcrowding of the alternatives marketplace.

– Fees are a concern to investors but over a third of investors believe that fees are fair as long as return expectations are met.

Commenting on the findings, John Hunt, CEO of Institutional Americas at JPMorgan Asset Management, said: “What our survey indicates is that alternatives, used in the right way, are enabling investors to better tailor investment strategies to address their myriad of financial and investment concerns, be it controlling volatility, boosting returns, or hedging inflation.”

SOURCE JPMorgan Asset Management

Collecting fine art used to be a luxury reserved for the rich and well connected. Today, however, collecting art is an investment strategy that, with a little interest and research, can prove to be both enjoyable and lucrative. Not long ago, an article in Forbes reported that, over a number of different time periods, art outperformed the S&P 500. Even in the months following September 11th, amid recession and war, art auction houses saw new sales records set for more than thirty artists. A study by New York University, which examined twenty seven recessions and four wars, concluded that art’s value tends to hold up well during periods of economic difficulty and that art indices always outperform major stock indices during times of war.

The paradox of investing in art is that its value is intangible, yet it is also a physical object subject to wear and tear, traded like oil or currency futures, and priced according to the dictates of fashion. While certain objective standards affect prices, experienced investors understand that these have little or nothing to do with artistic merit.

The art market has ruined many more investors than it has enriched; perhaps people who paid too much for “brand-name” art in the mistaken belief that it was a safe haven. During the asset inflation of the 1980s, Japanese buyers spent more than USD8.7 billion on art (“Art Bought during Boom Leaves Japan after Crash,” New York Times, August 15, 1999).

Investment characteristics
- Over the last thirty years the art market has shared characteristics with luxury goods, commodities and property markets. But art has a low correlation with most financial assets, thereby providing good diversification potential.
- Prices tend to rise higher towards the end of an economic cycle, when growth and inflation are above trend.
- Three quarters of buyers consider themselves collectors and less than five per cent investors, with the rest in between. This provides the art market with its stability during economic downturns, inflation and even war, since art is regarded as a store of financial and sentimental value.
- Art can also provide high returns when more investors are willing to buy the dwindling supply available, helped by fewer investment opportunities elsewhere.
- At the June 2006 Post War and Contemporary art auctions in London, the average annual returns for 44 lots sold (bought between the 1970s and early 21st century) was 13.14 per cent, including transaction costs. During the last eighteen months, the Post War and Contemporary art market has risen over 100 per cent.
- The risks art investors should inform themselves about include and are not restricted to: provenance, the fact that the market suffers from uneven supply, long holding periods, heterogeneity, lack of transparency, high transaction costs, illiquidity etc. .
- Since art does not necessarily pay interest, dividends or rent (note, increasingly collectors, galleries and museums are renting their art), primarily returns rely on capital gains only. Nevertheless, some institutions, such as Barclays Capital, suggest allocation up to 10 per cent of a portfolio in art over the next 10 to 20 years.

Opalasque, formed in 2001 with a vision provide professional news services to participants in the alternative investment sector, is headed by Mr. Matthias Knab, an internationally known expert in hedge funds and alternatives. Since inception, Opalesque has been providing premium online information services related to hedge funds and investment industries. Opalesque changed the world by bringing transparency, where there was opacity, and by delivering an accurate professional reporting service.

Premium offerings by Opalesque, which changed the hedge fund media space:

A Square = Alternative Alternatives = A2

A Square is the first web publication, globally, that is dedicated exclusively to “alternative” investments. A SQUARE’s weekly selection features unique investment opportunities, that bear virtually no correlation to the mainstream hedge fund strategies and/or distinguish themselves by virtue of their “alternative” motive – social, behavioral, natural resources, environment related investing.

A Square is a source for the investors seeking the latest strategies, looking for the convenient source to invest and stay ahead of the others. This publication from Opalesque provides the investor to generate interest towards the diversified wide range of options available to invest and help them to break new grounds to invest.

A Square, the flagship product of Opalesque, is an ocean of information about the alternatives in investment. It contains streamlined and deep information, which help in decision-making and aids in gaining competitive advantage. It gives complete information about the diverse ways of gaining maximum return on investment with a least possible risk factor. The different alternative ways of investment provides the investor a way to think in a broader path.

The “A SQUARE alternative” universe:

Traditional Alternatives:

·      Real estate

·      Commodities – gold, silver, copper, etc.

·      Currencies

·      Collectibles – art, wine, vintage cars, coins, postage stamps, etc.

·      All forms of credit based lending/factoring

Modern Alternatives:

·      New asset classes:

·      Investible Indices

·      ETFs

·      Structured finance – SPV, certificates, notes, synthetics

·      Hybrid products

·      Environment and infrastructure led investing: carbon emissions; waste re-cycling; water, air, forest, energy; new tech; clean tech and beyond

·      Psychology based investing: behavioral finance; “vice” investing

·      Entertainment financing – movies, music and more.

]]> http://alternativealternatives.wordpress.com/2009/04/08/a-square/feed/ 0 alternativealternatives