BRI Partners Launches New Family of Beta-Focused Hedge Fund Indexes

Mar 21 2017 | 4:55pm ET

Former hedge fund seeding company BRI Partners has launched a new family of investable hedge fund indexes that will deliver the beta of alternative strategies.

The BRI Long/Short Equity Index (BRILSE), calculated in conjuction with indexing specialist Wilshire Associates, is the first of eight measures that will be rolled out over the coming months, the company said in a statement. 

Unlike existing hedge fund indexes, the BRI Indexes do not measure the performance of hedge fund managers and, therefore, do not rely on managers to provide a snapshot of month-end results. 

Decades of economic and academic research are the foundation for each BRI Index, the company added, which are built from the risk factors used by hedge funds while avoiding the discretionary, behavioral and business risk of active funds.

Uniquely, each BRI index:

  • Provides efficient exposure to the same risk/return profile of hedge fund strategies
  • Does not require hedge fund managers to provide their monthly performance
  • Serves as a true beta benchmark for performance of actively managed funds
  • Assists investors and managers to identify and demystify alpha in active managers

“We have a singular objective to create a family of investable indexes that cost-effectively and efficiently deliver the true beta of alternative strategies,” said Adam Brass, founder of BRI Partners, in the statement. “We do not measure hedge fund manager performance, rather, we have identified the risk factors used by hedge funds that measure their beta performance before their strategies seek to capture alpha. 

“This measure provides investors and managers with a vital benchmark that has never been available until now,” he added. “The timing could not be better.”

In tandem with Wilshire Associates, which calculates the daily price of the index, the new benchmark comes to market at a cost that rivals most passive investments, BRI said. Each index in the family will be low-cost, transparent, scalable and liquid.

Founded in 2001 as a hedge fund seeder, BRI Partners divested the hedge fund companies in its portfolio and re-established itself as a creator and licensor of investable beta hedge fund indexes. The company also specializes in research focused on quantifying, analyzing and demystifying the risk and alpha in alternative strategies. 

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