Guest Contributors

Matt O'MalleyPeer-to-peer lending platform LendingClub Corp. has been in the news since the firm’s board accepted the resignation of CEO Renaud Laplanche for, among other missteps, investing in a fund that purchases LendingClub loans. In this contributed article, Matt O'Malley, president and COO of alternative fixed-income firm Looking Glass Investments, contends the episode sheds light on a set of industry-wide questions that need to be addressed, including the ability to use capital inflows to mask actual default rates, false promises of instant liquidity, and the lending platform internal hedge fund.

Amidst a steady stream of negative quotes and articles about the hedge fund industry, Agecroft Partners’ Don Steinbrugge used an address at the 69th CFA Institute Annual Conference in Montreal to address a few examples of the current sentiment - and their implications. 

Don SteinbruggeThe recent decision by the New York City Employment Retirement System to exit its $1.4 billion of hedge fund investments has raised eyebrows in the industry as a potential harbinger of things to come. In this contributed article, Don Steinbrugge, managing partner of hedge fund marketing firm Agecroft Partners, explains why the trustees of NYCES should reconsider their decision.

Rod WhiteCyber risk often flies below the radar of alternative investment managers. But it is real, and increasingly prevalent in third-party partners like administrators and data partners because of the online connections they have to a fund manager’s most sensitive information though cloud-based resources. In this contributed article, Rod White, director and regional CEO of fund administrator Equinoxe Alternative Investment Services, writes that managers must view third-party cyber risk with the same thoroughness as the other risks they face.

Adam PattiIn this contributed article, Adam Patti, founder and CEO of exchange-traded fund and liquid-alternatives pioneer IndexIQ, takes a look at some of the current misconceptions around hedge funds, and the opportunities that may exist this year for outperformance over their long-only peers. The growth in liquid alternatives, however, raises potential challenges as investors navigate the increasing scope, range and complexity of such offerings - and the roles they can play in a portfolio.

For investors, the first step in researching a new fund or manager is to google them, and what they find will either encourage or derail further discussions. Surprisingly, most managers don’t think about digital reputation until something goes wrong - a disgruntled former employee starts posting disparaging or untrue information online, bad press from events years ago overshadows recent performance, etc. A better approach, explains Christina Bertinelli of Lumentus, is to actively curate your digital reputation so that the information available online – and what comes up on the first page of those search engine results – tells the right story.

Bruce FrumermanIn this contributed article, Bruce Frumerman of Frumerman & Nemeth takes a close look at where many hedge fund sales efforts falter, and what managers and hedge fund business owners can do in order to increase the effectiveness of their sales teams. As he explains, it starts with knowing who to pursue and when to pursue them, and includes arming sales personnel with the proper tools and information to explain a fund's approach, acumen and competitive advantages to people not just during the sales meeting, but also after it's over. Hint: It's not a bullet-point pitchbook.

The increasing reliance of third-party SaaS systems is a macro trend in the alternative investment industry. They enable managers to concentrate on building their core businesses without the distraction of complex systems administration, development and technology infrastructure. Yet for as much as hedge fund managers worry about risk in their portfolios, they may not be paying enough attention to the risks inherent in deploying such third-party systems, explains Robert Barsky of C&A Consulting in this guest article.

Cliff Stanton, CFAAs the financial world adjusts to the dawn of a post-ZIRP world (at least in the U.S.), there is no shortage of commentary about what the Fed’s first hike in nearly a decade means for various asset classes. In this contributed article, Cliff Stanton, CIO of liquid alternatives specialist 361 Capital, gives his take on why the rate hike might actually benefit some alternative investments more than others. 

Eric ZollerAmid a robust market environment for private equity, spinouts from existing firms are becoming increasingly common. In this contributed article, Eric Zoller, co-founder of private equity services specialist Sixpoint Partners, identifies key factors behind the proliferation of private equity firms, gives recommendations on how spinouts can best be accomplished, and explains the “magic number” every GP should know.