Post Modern Investment

Debunking outdated and inaccurate beliefs about investment management and reveals the new realities of the post–modern financial markets There have been a lot of big changes in the investment world over the past decade, and many long–cherished beliefs about the structures and performance of various investments no longer apply. Unfortunately the news seems not to have reached many thought leaders and investment professionals who persist in trying, and failing, to apply 20th–century thinking to 21st–century portfolio management. Nowhere is this more true than when it comes to the subject of alternative investments. Written by an all–star team of investment management experts, this book debunks common myths and misconceptions about most classes of alternative investments and offers valuable advice on how to develop investment management and asset allocation strategies consistent with the new realities of the ever–changing world of alternative investments. Covers most alternative asset classes, including private equity, real estate, managed futures, hedge funds, commodity indices, and more Debunks long–held assumptions about the structure and performance of various investment classes that continue to dominate the industry Explores the implications for investment managers of the proliferation of international marketable securities and global financial markets Provides an overview of both the micro and the macro aspects of each alternative investment class

Preface xiii Acknowledgments xxi CHAPTER 1 Investment Ideas: Evolution or Revolution? 1 CHAPTER 2 Equity and Fixed Income: The Traditional Pair 31 CHAPTER 3 Hedge Funds: An Absolute Return Answer? 63 CHAPTER 4 Managed Futures: A Zero–Sum Game? 101 CHAPTER 5 Commodities: An Ever–Changing Balance 133 CHAPTER 6 Private Equity: Its True Value? 167 CHAPTER 7 Real Estate: The New World 199 CHAPTER 8 Asset Allocation: The Simple Way and the Hard Way 231 CHAPTER 9 Risk Management: An Oxymoron 257 CHAPTER 10 In Conclusion 285 Notes 289 Bibliography 295 About the Authors 299 Index 301