Publications

November 2017
Sector in Brief: Agriculture and Timberland

Sector in Brief: Agriculture and Timberland
Agriculture and Timberland have received strong attention from institutional investors in 2017, as have other “niche” real assets. While Timberland is a relatively well established sector, the past three years have seen a distinctive new group of non-timber agriculture funds coming onto the scene. This research note tackles structures, fees, opportunity types and risks.

November 2017
Manager Intelligence and Market Trends: bfinance Quarterly Report

Manager Intelligence and Market Trends: bfinance Quarterly Report
Our quarterly snapshot of the key developments within equity, fixed income and alternative investments, including analysis of which asset manager groups performed well and which didn't. Q3 continued a strong year for active equity funds, while high yield credit managers struggled to beat their benchmarks. With private market fundraising experiencing a decline, emerging market investment remains the key theme in new fixed income and equity mandates from institutional investors.

October 2017
New Equity Perspectives

New Equity Perspectives
The latest bfinance data reveals major changes in institutional investors’ equity mandates through 2017. This collection of articles explores the most significant shifts and addresses key debates within emerging market equities, ESG integration and active/passive management.

October 2017
Sector in Brief: Trade Finance

Sector in Brief: Trade Finance
2012-15 saw papers touting trade finance as a hot new asset class. Yet interested investors encountered a lack of data, a limited group of managers and a high degree of opacity regarding the performance of their underlying book. The sector has evolved substantially: there are now more than 20 viable managers for institutional investors to consider, nearly half of which have set up funds in this space since 2010. This paper provides an overview of the trade finance asset class and highlights key issues for investors.

September 2017
DNA of a Manager Search: Infrastructure

DNA of a Manager Search: Infrastructure
Investors seeking unlisted infrastructure today face an increasingly diverse and challenging opportunity set. Closer examination of three recent infrastructure searches highlights the recent compression of returns and reveals intriguing new developments such as the proliferation of sector-specific players, a growing proportion of greenfield exposure and greater emphasis on managers’ ability to ‘add value’.

August 2017
How Have Alternative Risk Premia Strategies Performed?

How Have Alternative Risk Premia Strategies Performed?
Despite the attractions of the rapidly growing Alternative Risk Premia sector, a lack of straightforward performance data has proven to be an obstacle as investors have grappled with potentially over-fitted back-tests or carve-outs. Yet we now see a critical mass of providers whose live track records are reaching or have passed the three-year mark. We ask: what insights does this new data provide and what are the sources of the large performance dispersion among managers?

August 2017
Manager Intelligence and Market Trends: bfinance Quarterly Report

Manager Intelligence and Market Trends: bfinance Quarterly Report
Our quarterly snapshot of the key developments within equity, fixed income and alternative investments, including analysis of which asset manager groups performed well and which didn't. Q2 2017 saw a continuation of the risk-seeking sentiment of Q1, despite an initial wobble. Client activity to June reveals a surge in emerging market appetite, while the rate of new investment in certain private asset classes has declined from the heights of 2016.

Managing Currency Risk

June 2017
Managing Currency Risk in a Two-Speed World

Managing Currency Risk in a Two-Speed World
As interest rates in the US and Europe/Japan diverge, today's climate provokes a rethink of historic decisions around currency hedging and currency management. More tactical approaches, including active currency overlays, are experiencing a revival in popularity. Meanwhile, FX management costs face closer scrutiny, with Transaction Cost Analysis coming to the fore. A 'DNA of a Manager Search' reveals current strategies and pricing.

UCITS - Hedge Fund

June 2017
Sector in Brief: Sub-Advisor UCITS Fund of Hedge Funds

Sector in Brief: Sub-Advisor UCITS Fund of Hedge Funds
The ‘sub-advisor fund of hedge fund’ (or ‘fund of sub-advisor’) model is the latest innovation to disrupt the traditional multi-manager fund of hedge fund structure. Last year saw major industry names launching the first commercially available products of this type; 2017 has brought the first allocations by bfinance clients.

May 2017
Investment Management Fees: New Savings, New Challenges

Investment Management Fees: New Savings, New Challenges
New bfinance data reveals falling fees in several sectors, especially where providers have been under pressure from cheaper competitors or the investment landscape has evolved. Meanwhile, many asset managers have seized the opportunity to launch fashionable products at a premium to their conventional equivalents, with certain breeds of unconstrained, multi-asset or advisory mandates sitting at the top of that list.

May 2017
Manager Intelligence and Market Trends: bfinance Quarterly Report

Manager Intelligence and Market Trends: bfinance Quarterly Report
Our quarterly snapshot of the key developments within equity, fixed income and alternative investments, including analysis of which asset manager groups performed well and which didn't. Q1 2017 saw the most risk-seeking quarter since 2014, as the post-Trump optimism continued, and better performance from active managers. This report also includes analysis of bfinance engagements for the year to March 2017, providing insight into investors' asset allocation priorities.

March 2017
Direct Lending: What's Different Now?

Direct Lending: What’s Different Now?
With global institutional appetite for private debt remaining strong into 2017, the pile of dry powder chasing corporate direct lending has never been higher. Yet analysis reveals that senior debt funds are riskier today than they were in 2012 in a variety of different ways. Is now a good time to invest in direct lending? While the answer may still be “yes,” a deep understanding of what’s under the bonnet will be key to successful implementation.

February 2017
Sector in Brief: Taxable Municipal Bonds

Sector in Brief: Taxable Municipal Bonds?
The persistence of a record low-yield climate has increased the appetite of international investors for this higher yielding, high quality asset class. In many ways it offers a unique substitute to long duration government and corporate bonds for the purpose of matching liabilities.

February 2017
Manager Intelligence and Market Trends: bfinance Quarterly Report

Manager Intelligence and Market Trends: bfinance Quarterly Report
Our quarterly snapshot of the key developments within equity, fixed income and alternative investments, including analysis of which asset manager groups performed well and which didn't. Q4 2016 featured remarkable rotations in multiple markets, characterised by a significantly more bullish sentiment than earlier months, with the bfinance Risk Aversion Index falling to a two-year low. This report also includes analysis of bfinance engagements for 2016, providing insight into investors' asset allocation priorities.

January 2017
DNA of a Manager Search: ESG in Private Debt

DNA of a Manager Search: ESG in Private Debt
Following the previous white paper “ESG Under Scrutiny: Lessons from Manager Selection,” this concise article provides a snapshot of one particular private debt search. Produced for the LAPF Strategic Investment Conference 2017.

December 2016
ESG Under Scrutiny: Lessons from Manager Selection

ESG Under Scrutiny: Lessons from Manager Selection
A deep dive into two recent manager searches – a Private Debt mandate for the UK Environment Agency Pension Fund and a Public Equity allocation for a European family office – reveals practical challenges and lessons for sustainability integration. How easy is it to distinguish between sophisticated marketing and real substance? Whilst the universe of ESG products continues to expand across a range of asset classes, highly variable investor requirements make a bespoke approach particularly useful.

November 2016
Raising the Stakes in Private Markets

Raising the Stakes in Private Markets
The growth of private market investment is perhaps the single largest institutional asset allocation theme of the post-2008 period. Yet real-life results can vary wildly from modelled risks and returns. In September 2016, bfinance brought together 46 asset owners in a series of small, closed-door roundtables. Read their insights here.

October 2016
The Changing World of Alternative Beta

The Changing World of Alternative Beta
When it comes to defining and implementing an alternative beta allocation, a great deal can fall through the cracks between theory and practice. The sector is extremely heterogeneous and evolving quickly: in 2016 alone, the universe of providers has increased by more than 30%. In this paper, we reveal detailed insights from recent in-house analysis, ranging from fee levels and structures to the potential benefits of combining multiple managers.

November 2016
DNA of a Manager Search: Global Sharia Equities

DNA of a Manager Search: Global Sharia Equities
A recent Global Sharia equities search shows that this sector is wide open to new manager participants and underscores the importance of a flexible, tailored approach in a market where the available products don’t map easily onto client preferences. Asset managers revealed very different methods for achieving Sharia compliance, with filters such as the MSCI Islamic World proving more restrictive than others.

September 2016
Real Estate Debt: As Good As It Gets?

Real Estate Debt: As Good As It Gets?
Over recent years, real estate debt managers have been able to deliver good performance with exceptionally low loss rates. This is good news for the investors and for the asset classes as a whole but, given the favourable market conditions, their teams and processes have not been well tested, certainly in Europe. Most teams have been established during a time of near-perfect market conditions of strong asset performance and continued compression in interest rates.

July 2016
Life Settlements

Life Settlements
Like the wider insurance-linked asset class, life settlements are a valuable diversifier to a portfolio providing access to alternative risk premia (longevity risk) and return streams uncorrelated to capital markets, attractive returns, and high credit quality. This paper explores the opportunity further, market dynamics, as well as insights into the Life Settlement manager universe drawn from a recent bfinance manager search and selection exercise.

July 2016
DNA of a Manager Search: Alternative Beta

DNA of a Manager Search: Alternative Beta
This case study draws on our recent manager search for a large US corporate pension scheme allocating $1bn to alternative beta strategies. It aims to shed light on the practicalities of investing and what investors can realistically expect from such allocations. Amongst other things, the piece explores the client’s rationale, the manager screening and analysis process, portfolio construction, as well as some key lessons for investors. This content is confidential to asset allocators only. To read, please contact the authors Toby Goodworth (tgoodworth@bfinance.com) or Chris Stevens (cstevens@bfinance.com).

April 2016
Multi-asset Strategies

Multi-asset Strategies
Multi-asset strategies are a diverse group of investment approaches varying widely in their permitted investment universe, investment style and risk/return objectives. Products range from traditional balanced, though more diversified but still largely long-only, to true absolute return strategies which may have more in common with hedge funds. The level of complexity, risk/return objectives and many other factors in the multi-asset space vary widely, so careful mandate definition and manager selection is key.

March 2016
Dissecting the ‘MAC’ Universe

Dissecting the 'MAC' Universe
Multi-Asset Credit (MAC) strategies can play an important role in investors’ portfolios, from adding return with modest risk though credit beta and security selection, or indeed to diversify and de-risk a growth portfolio without giving up excess return. bfinance's John Amoasi, Senior Associate, Public Markets, Fixed Income Specialist, explores the asset class and why and how investors should assess the suitability of MAC strategies within the broader portfolio.

January 2016
Senior Commercial Real Estate Debt

Senior Commercial Real Estate Debt
Commercial real estate debt offers an attractive opportunity for investors to take advantage of a dislocated market previously dominated by banks. In this paper, bfinance's Dharmy Rai explores the opportunity further and key considerations of implementation.

November 2015
Absolute Return Fixed Income

Absolute Return Fixed Income
bfinance’ fixed income specialists discuss how absolute return fixed income strategies are able to improve the risk/return profile of a traditional global fixed income portfolio. The paper also shares insights into the manager universe, the diversity of strategies that exist, as well as issues for consideration in manager selection.

September 2015
UCITS Liquid Alternatives & Hedge Funds

UCITS Liquid Alternatives & Hedge Funds
Why UCITS? Why Now? FAQs answered.

August 2015
Alternative Beta

Alternative Beta
In this paper, bfinance’s Chris Stevens examines ‘alternative beta’, a further extension of beta investing into the realm of alternatives. From its definition and implementation to why invest, he also explores some potential issues for consideration.

August 2015
Japan Equity

Japan Equity
Against the backdrop of Abenomics’ three arrows of fiscal stimulus, monetary easing and structural reforms, bfinance’ equity specialists explore how markets are structured in Japan and the benchmarks available; risk/return expectations; the investment manager universe and key selection criteria; followed by current themes and opportunities.

June 2015
Protecting Portfolios When Credit Spreads Widen

Protecting Portfolios When Credit Spreads Widen
Dr. Chris Jones, Head of Investment Advisory & John Amoasi, Senior Associate, discuss a range of viable strategies that can be taken to protect portfolios in an environment where credit spreads widen, namely Long only opportunistic credit funds; Long / short credit funds; and Direct hedging using the derivatives market.

February 2015
Investment Management Fees : Seeking Value for Money

Investment Management Fees - Seeking Value for Money
bfinance's latest study on investment management fees reveals that reliable alpha does not, necessarily, come with higher charges for investors. Rather, consistent and outperforming managers tend to follow a slightly below average pricing policy, leaving the most sophisticated institutional investors with a significant ability to find the best value for money through negotiation.

November 2014
Building More Robust Portfolios

Building More Robust Portfolios
Dr Chris Jones, Head of bfinance London, and Dr Toby Goodworth, Head of Risk Management, discuss a methodology to build more robust portfolios that have a better chance of holding up in tough times

October 2014
Managed Futures and Core Trend-Following

Managed Futures and the Emergence of Core Trend-Following
Dr Toby Goodworth, Director in the Hedge Fund and Liquid Alternatives team at bfinance, investigates Managed Futures strategies, assessing the recent development of Core Trend-Following and the benefits they could bring to institutional investors’ portfolios

June 2014
Risks in Private Real Estate Investing

Risks in Private Real Estate Investing
Derek Williams, Head of Private Markets, highlights the main risks associated with investing in real estate – both via funds and directly – and comments on how to analyse and mitigate these risks.

April 2014
Focus Ukrainian Crisis

Fixed Income – Hybrid Bonds Viewpoint
As Hybrid Bonds enjoyed record issuance levels over 2013, Mathias Neidert, Head of Public Markets Research, takes a look at the asset class and reviews some of the critical factors that potential investors should keep in mind.

April 2014
White Paper - Absolute Return Strategies

Ukraine Crisis – Increasing Segmentation, But Limited Contagion

June 2014
Hybrid Bonds Viewpoint

Absolute Return Strategies - Dissecting the Manager Universe
bfinance’s research team landscapes in this short article the market for “all weather funds”, and what investors are actually getting under the wrappers.

March 2014
White Paper - Allocating to Smart Beta

The Practicalities of Allocating to Smart Beta
A complete guide to Smart Beta investing based on information collected during our latest review of Smart Beta strategies for a large institution.

January 2014
Pension Fund Asset Allocation Survey

Pension Fund Asset Allocation Survey 2014
Shielding From Potential Market Storms Ahead

The 9th edition of the bfinance Pension Fund Asset Allocation Survey provides insights into how major asset owners plan to respond to the anticipated scale down in the Federal Reserve’s asset purchase programme. In their responses, institutional investors reiterate their intention to allocate more to private assets. In order to protect their portfolios from anticipated future volatility, they show an interest in solutions that permit an increased exposure to risky assets through an improved management of volatility.

January 2014
White Paper - Bond Management in Volatile Times

Call for Active Bond Management
As central bankers ponder fine-tuning monetary policy, yield volatility promises to rise over the coming months. Interest rate management becomes critical, but investors should also be on the lookout for sources of alpha where the return per unit of risk may be more consistent.

July 2013
White Paper - Review of Smart Beta Approaches

Combining Smart Beta Approaches
Combining smart beta approaches is a cost-effective way to enhance the performance of the portfolio without incurring severe tracking error risk. Understanding the variety of risk premia these approaches aim to capture is necessary.

April 2013
Risk Management Survey

Further improvements foreseen in Risk Management systems
The resources allocated to risk management are not keeping pace with the need for heightened risk monitoring, shows a new bfinance survey of institutional investors.