Publications

December 2017
Emerging Market Debt: to Blend or Not to Blend

Emerging Market Debt: to Blend or Not to Blend
One key decision has dominated EMD investors’ performance over the past decade: the use of hard versus local currency bonds. This year has seen “Blended EMD” funds becoming increasingly popular and “mixed flows” at their highest ever volume. Yet what are these strategies really designed to accomplish? How are they implemented? How can they be assessed and compared? This paper seeks to answer critical practical questions.

November 2017
Sector in Brief: Agriculture and Timberland

Sector in Brief: Agriculture and Timberland
Agriculture and Timberland have received strong attention from institutional investors in 2017, as have other “niche” real assets. While Timberland is a relatively well established sector, the past three years have seen a distinctive new group of non-timber agriculture funds coming onto the scene. This research note tackles structures, fees, opportunity types and risks.

November 2017
Manager Intelligence and Market Trends: bfinance Quarterly Report

Manager Intelligence and Market Trends: bfinance Quarterly Report
Our quarterly snapshot of the key developments within equity, fixed income and alternative investments, including analysis of which asset manager groups performed well and which didn't. Q3 continued a strong year for active equity funds, while high yield credit managers struggled to beat their benchmarks. With private market fundraising experiencing a decline, emerging market investment remains the key theme in new fixed income and equity mandates from institutional investors.

October 2017
New Equity Perspectives

New Equity Perspectives
The latest bfinance data reveals major changes in institutional investors’ equity mandates through 2017. This collection of articles explores the most significant shifts and addresses key debates within emerging market equities, ESG integration and active/passive management.

October 2017
Sector in Brief: Trade Finance

Sector in Brief: Trade Finance
2012-15 saw papers touting trade finance as a hot new asset class. Yet interested investors encountered a lack of data, a limited group of managers and a high degree of opacity regarding the performance of their underlying book. Yet the sector has evolved substantially: there are now more than 20 viable managers for institutional investors to consider, nearly half of which have set up funds in this space since 2010. This paper provides an overview of the trade finance asset class and highlights key issues for investors.

September 2017
DNA of a Manager Search: Infrastructure

DNA of a Manager Search: Infrastructure
Investors seeking unlisted infrastructure today face an increasingly diverse and challenging opportunity set. Closer examination of three recent infrastructure searches highlights the recent compression of returns and reveals intriguing new developments such as the proliferation of sector-specific players, a growing proportion of greenfield exposure and greater emphasis on managers’ ability to ‘add value’.

August 2017
How Have Alternative Risk Premia Strategies Performed?

How Have Alternative Risk Premia Strategies Performed?
Despite the attractions of the rapidly growing Alternative Risk Premia sector, a lack of straightforward performance data has proven to be an obstacle as investors have grappled with potentially over-fitted back-tests or carve-outs. Yet we now see a critical mass of providers whose live track records are reaching or have passed the three-year mark. We ask: what insights does this new data provide and what are the sources of the large performance dispersion among managers?

August 2017
Manager Intelligence and Market Trends: bfinance Quarterly Report

Manager Intelligence and Market Trends: bfinance Quarterly Report
Our quarterly snapshot of the key developments within equity, fixed income and alternative investments, including analysis of which asset manager groups performed well and which didn't. Q2 2017 saw a continuation of the risk-seeking sentiment of Q1, despite an initial wobble. Client activity to June reveals a surge in emerging market appetite, while the rate of new investment in certain private asset classes has declined from the heights of 2016.

Managing Currency Risk

June 2017
Managing Currency Risk in a Two-Speed World

Managing Currency Risk in a Two-Speed World
As interest rates in the US and Europe/Japan diverge, today's climate provokes a rethink of historic decisions around currency hedging and currency management. More tactical approaches, including active currency overlays, are experiencing a revival in popularity. Meanwhile, FX management costs face closer scrutiny, with Transaction Cost Analysis coming to the fore. A 'DNA of a Manager Search' reveals current strategies and pricing.

UCITS - Hedge Fund

June 2017
Sector in Brief: Sub-Advisor UCITS Fund of Hedge Funds

Sector in Brief: Sub-Advisor UCITS Fund of Hedge Funds
The ‘sub-advisor fund of hedge fund’ (or ‘fund of sub-advisor’) model is the latest innovation to disrupt the traditional multi-manager fund of hedge fund structure. Last year saw major industry names launching the first commercially available products of this type; 2017 has brought the first allocations by bfinance clients.

Investment Management Fees

Mei 2017
Investment Management Fees: Nieuwe Besparingen, Nieuwe Uitdagingen

Investment Management Fees: Nieuwe Besparingen, Nieuwe Uitdagingen
Nieuwe bfinance-gegevens tonen dalende vergoedingen aan in verscheidene sectoren, met name daar waar aanbieders onder druk hebben gestaan van goedkopere concurrenten of de beleggingsomgeving is veranderd. In de tussentijd hebben veel vermogensbeheerders gebruik gemaakt van de gelegenheid om moderne producten te introduceren naast hun traditionele equivalenten, met bepaalde vormen van “unconstrained”, multi-assetof adviseringsmandaten die deze lijst aanvoeren.

May 2017
Manager Intelligence and Market Trends: bfinance Quarterly Report

Manager Intelligence and Market Trends: bfinance Quarterly Report
Our quarterly snapshot of the key developments within equity, fixed income and alternative investments, including analysis of which asset manager groups performed well and which didn't. Q1 2017 saw the most risk-seeking quarter since 2014, as the post-Trump optimism continued, and better performance from active managers. This report also includes analysis of bfinance engagements for the year to March 2017, providing insight into investors' asset allocation priorities.

Direct Lending: Wat is er veranderd?

Direct Lending: Wat is er Varandered?
With global institutional appetite for private debt remaining strong into 2017, the pile of dry powder chasing corporate direct lending has never been higher. Yet analysis reveals that senior debt funds are riskier today than they were in 2012 in a variety of different ways. Is now a good time to invest in direct lending? While the answer may still be “yes,” a deep understanding of what’s under the bonnet will be key to successful implementation.

February 2017
Sector in Brief: Taxable Municipal Bonds

Sector in Brief: Taxable Municipal Bonds?
The persistence of a record low-yield climate has increased the appetite of international investors for this higher yielding, high quality asset class. In many ways it offers a unique substitute to long duration government and corporate bonds for the purpose of matching liabilities.

February 2017
Manager Intelligence and Market Trends: bfinance Quarterly Report

Manager Intelligence and Market Trends: bfinance Quarterly Report
Our quarterly snapshot of the key developments within equity, fixed income and alternative investments, including analysis of which asset manager groups performed well and which didn't. Q4 2016 featured remarkable rotations in multiple markets, characterised by a significantly more bullish sentiment than earlier months, with the bfinance Risk Aversion Index falling to a two-year low. This report also includes analysis of bfinance engagements for 2016, providing insight into investors' asset allocation priorities.

December 2016
ESG Onder de Loep: Lessen uit Managerselectie

ESG Onder de Loep: Lessen uit Managerselectie
Afwegingen als milieu, maatschappij en deugdelijk ondernemingsbestuur (Environmental Social and Governance, “ESG”) worden steeds belangrijker in de investeringsgemeenschap, in alle vermogenscategorieën. Aangezien de ESG-prioriteiten en –principes enorm verschillen tussen beleggers, is de afstemming tussen beleggingsbeheerder en allocator absoluut niet eenvoudig. Artikel in het Engles, met een inleiding in het Nederlands.

November 2016
The Changing World of Alternative Beta

the Changing World of Alternative Beta (De veranderende wereld van Alternatieve Beta)
When it comes to defining and implementing an alternative beta allocation, a great deal can fall through the cracks between theory and practice. The sector is extremely heterogeneous and evolving quickly: in 2016 alone, the universe of providers has increased by more than 30%. In this paper, we reveal detailed insights from recent in-house analysis, ranging from fee levels and structures to the potential benefits of combining multiple managers.

November 2015
Absolute Return Fixed Income

Absolute Return Fixed Income
bfinance’ fixed income specialists discuss how absolute return fixed income strategies are able to improve the risk/return profile of a traditional global fixed income portfolio. The paper also shares insights into the manager universe, the diversity of strategies that exist, as well as issues for consideration in manager selection.

September 2015
UCITS Liquid Alternatives & Hedge Funds

UCITS Liquid Alternatives & Hedge Funds
Why UCITS? Why Now? FAQs answered.

August 2015
Alternative Beta

Alternative Beta
In this paper, bfinance’s Chris Stevens examines ‘alternative beta’, a further extension of beta investing into the realm of alternatives. From its definition and implementation to why invest, he also explores some potential issues for consideration.

February 2015
Investment Management Fees - Seeking Value for Money

Investment Management Fees - Seeking Value for Money
bfinance's latest study on investment management fees reveals that reliable alpha does not, necessarily, come with higher charges for investors. Rather, consistent and outperforming managers tend to follow a slightly below average pricing policy, leaving the most sophisticated institutional investors with a significant ability to find the best value for money through negotiation.

November 2014
Building More Robust Portfolios

Building More Robust Portfolios
Dr Chris Jones, Head of bfinance London, and Dr Toby Goodworth, Head of Risk Management, discuss a methodology to build more robust portfolios that have a better chance of holding up in tough times

October 2014
Managed Futures and Core Trend-Following

Managed Futures and the Emergence of Core Trend-Following
Dr Toby Goodworth, Director in the Hedge Fund and Liquid Alternatives team at bfinance, investigates Managed Futures strategies, assessing the recent development of Core Trend-Following and the benefits they could bring to institutional investors’ portfolios

June 2014
Risks in Private Real Estate Investing

Risks in Private Real Estate Investing
Derek Williams, Head of Private Markets, highlights the main risks associated with investing in real estate – both via funds and directly – and comments on how to analyse and mitigate these risks.

June 2014
Hybrid Bonds Viewpoint

Fixed Income – Hybrid Bonds Viewpoint
As Hybrid Bonds enjoyed record issuance levels over 2013, Mathias Neidert, Head of Public Markets Research, takes a look at the asset class and reviews some of the critical factors that potential investors should keep in mind.

April 2014
Focus Ukrainian Crisis

Ukraine Crisis – Increasing Segmentation, But Limited Contagion

April 2014
White Paper - Absolute Return Strategies

Absolute Return Strategies - Dissecting the Manager Universe
bfinance’s research team landscapes in this short paper the market for “all weather funds”, and what investors are actually getting under the wrappers.

March 2014
White Paper - Allocating to Smart Beta

The Practicalities of Allocating to Smart Beta
A complete guide to Smart Beta investing based on information collected during our latest review of Smart Beta strategies for a large institution.

January 2014
Pension Fund Asset Allocation Survey

Pension Fund Asset Allocation Survey 2014
Shielding From Potential Market Storms Ahead

The 9th edition of the bfinance Pension Fund Asset Allocation Survey provides insights into how major asset owners plan to respond to the anticipated scale down in the Federal Reserve’s asset purchase programme. In their responses, institutional investors reiterate their intention to allocate more to private assets. In order to protect their portfolios from anticipated future volatility, they show an interest in solutions that permit an increased exposure to risky assets through an improved management of volatility.

January 2014
White Paper - Bond Management in Volatile Times

Call for Active Bond Management
As central bankers ponder fine-tuning monetary policy, yield volatility promises to rise over the coming months. Interest rate management becomes critical, but investors should also be on the lookout for sources of alpha where the return per unit of risk may be more consistent.

July 2013
White Paper - Review of Smart Beta Approaches

Combining Smart Beta Approaches
Combining smart beta approaches is a cost-effective way to enhance the performance of the portfolio without incurring severe tracking error risk. Understanding the variety of risk premia these approaches aim to capture is necessary.

April 2013
Risk Management Survey

Further improvements foreseen in Risk Management systems
The resources allocated to risk management are not keeping pace with the need for heightened risk monitoring, shows a new bfinance survey of institutional investors.