What We Do
Tackling the nuanced world of unconventional investments
Alternative investments refer to funds or asset classes such as hedge funds, private equity funds, venture capital funds, managed futures, derivatives, real estate and commodities. While many people hear these terms on TV and radio news programs, few really know what they mean, how they function and what role they play in personal finance.
We believe it is important to educate students of all business disciplines about these nontraditional investments and their relevance to our economy. We also believe it is important to provide faculty with the means necessary to keep curricula current. To this end, the Alternative Investments Institute hosts a guest lecture series, conducts surveys among institutional investors by partnering with Wall Street firms and publishes white papers on the issues that affect the players in this field. These resources delve into the natures of these complex, high-worth, high-yield investment types.
Guest Lecture Series
Our Guest Lecture Series brings seasoned leaders from various industries to campus to share their experiences, perspectives and predictions for where the market is heading. Distinguished speakers have come from the banking, manufacturing, and innovation and technology industries. Lecture topics have ranged from managing money during the financial crisis to trading in agricultural commodities such as sugar, coffee and soybeans.
Investor Survey Project
The purpose of the Investor Survey Project is to gather insights, views and market beliefs of institutional investors as well as their opinions on various investment strategies. Past survey responders have represented the United States, EMEA (Europe, Middle East and Africa) and the Asia Pacific markets. We hope to better understand the views of major institutional investors on many topics, including allocation intentions, various asset class trends, the role of hedge funds in institutional portfolios, and the credit crisis of 2007–08 and subsequent global market downturn.
White Paper Series
Our White Paper Series offers a relevant, in-depth exploration of the many issues that affect players in the field of investing. Research areas have included hedge fund returns and long-term performance; dynamic trading and asset management strategies; and the correlation of alternative investments with the performance of stocks and bonds. White paper data is captured by seasoned researchers and thought leaders in the business world at large, and the field of investing specifically.
Investor Survey Project
The Alternative Investments Institute conducted its biannual institutional investor survey in conjunction with the Connecticut Hedge Fund Association. Our purpose was to gather insights of institutional investors regarding their current market beliefs and opinions on various investment strategies. In particular, we focused on the role of hedge funds in institutional portfolios. We received responses from investors who together manage $1.12 trillion in assets. All of our survey respondents are located in the United States.
Some highlights include:
- The sample of investors favors U.S. equities, private equity and hedge funds over ﬁxed income and commodities.
- Investors are putting money directly in hedge funds, although some also use funds-of-funds. This is consistent with the increasing “institutionalization” of the hedge fund industry.
- The most popular strategies in our sample are event-driven, long/short equity, and global macro funds.
- More than half of the investors surveyed had additional liquidity restrictions, such as gates or side-pockets, that affected 5% or more of their hedge fund allocation during the ﬁnancial crisis.
Institutional Investor Survey Fall 2010
The Bank of America Merrill Lynch (BofA Merrill Lynch) Capital Introductions Group recently conducted an institutional investor survey in conjunction with the Alternative Investments Institute and the Connecticut Hedge Fund Association. The purpose of the survey was to better understand the views of major institutional investors on a range of topics, including allocation intentions, various asset class trends and alternative investments. A total of 107 investors participated, representing the U.S., EMEA and Asia Pacific markets, and approximately $2.1 trillion in assets under management.
White Paper Series
State of Connecticut and the Hedge Fund Industry
Hedge funds are alternative investment vehicles that employ dynamic trading strategies and have been growing in terms of their numbers and assets under management (AUM). Current estimates place the number of active hedge funds at 10,000 industry-wide. The level of growth in the hedge fund industry is remarkable given the changing dynamics in the relationship between investors and hedge fund managers as concerns over liquidity, fees, lock-ups and transparency grow.
Hedge Fund Returns
Aiken, Clifford and Ellis use a unique sample of hedge fund returns that have been calculated from hand-collected SEC filings. By matching these returns to two different commercial databases, they are able to split the sample into two groups: funds that report (or have reported) to a database and funds that never (or no longer) report. Their data captures the returns for 1,445 distinct hedge funds, yielding more than 10,000 quarterly returns from 2004-2009. They concluded that the bias in commercially available hedge fund data is severe. Funds that do not report their returns to commercial databases have significantly worse performance than funds that do.