Alder Capital – the best performing unit linked fund?

[Brendan Burgess]

Re: A Great Debate that is actually shedding some light

Two quick points

<!--EZCODE BOLD START--> What happened in 1999 and 2000?<!--EZCODE BOLD END-->

The two principals were employed by Gaiacorp where Mark Caslin developed this currency model. He left in 1999 and set up Alder in about Sept 2000.

<!--EZCODE BOLD START--> The fee structure<!--EZCODE BOLD END-->

Yes the fee structure does encourage them to take risks. But it is a hurdle fee structure. Each year the hurdle is raised another 7%. In other words, if the fund drops by 10% this year, they need to achieve 17% next year before they earn their performance fee.

I had assumed that each year started afresh, so that a loss of 10% would not cost them anything at all.

I must reread some of the new comments and Neil Records paper to see can I get to grips with them.


Mith said "Rupert clearly is a highly informed fellow. Brendan has met Alder" ( he is not highly informed)
Rupert said"Easy read, Boss" ( in other words - even you would understand it!)

When I said to lay off the insults - I didn't mean to stop insulting each other and to insult me instead!

Brendan

 

[Rupert Bear]

Re: Boss you really oughta practice smiling

Now don't get all sensitive <!--EZCODE ITALIC START--> Boss<!--EZCODE ITALIC END-->. I think you understand more of this than you pretend.

I have to say I am now completely confused, what was that performance of 61% in 1995 referring to, if <!--EZCODE ITALIC START--> Alder<!--EZCODE ITALIC END--> was launched only recently?

<!--EZCODE ITALIC START--> Boss<!--EZCODE ITALIC END-->, Management fees of 16% if things go well and 2% guaranteed if they go badly are not in the consumer's interest.

I really do think this Hedge Fund thing is <!--EZCODE BOLD START--> dangerous<!--EZCODE BOLD END--> and there is enough informed commentary in this thread for AAM to take a lead in stopping this virus.

It promises double digit returns come what may, remember <!--EZCODE BOLD START--> TINSTAAFL<!--EZCODE BOLD END-->.

Past performance is hugely tilted by the "survivor bias" effect.

It sounds so awfully sophisticated that even such consumer champions as <!--EZCODE ITALIC START--> Mith<!--EZCODE ITALIC END--> are fooled.

The charging structure is dreadfully tilted towards the managers taking wild punts, if they win "bob's your uncle", they clean up, if they lose, take the 2% and try again under a different guise.

The objective research (and that was form a currency trader) available to AAM suggested that currency arbitrage opportunities amounts to no more than 1.9% per annum. Subtract retail charging structures and this is a complete no-no.

Verdict - <!--EZCODE BOLD START--> Guilty as Charged.<!--EZCODE BOLD END-->:rolleyes
:rupert

 

[Ludwig]

Hedge Funds

From my report:<!--EZCODE QUOTE START--><blockquote>Quote:<hr> <!--EZCODE ITALIC START--> <!--EZCODE BOLD START--> "His trading became essentially a hedge-fund operation. But one lone trader on Baltimore has no competitive advantage in this highly competitive, sophisticated market..."<!--EZCODE BOLD END--><!--EZCODE ITALIC END--><hr></blockquote><!--EZCODE QUOTE END-->

Let's face it, Hedge Funds are a zero-sum con.:rolleyes