As documented in numerous studies, a substantial portion of overall hedge fund returns can be attributed to systematic return drivers or risk factors. These factors can be either “traditional”-relating to equity and bond returns-or “alternative”-relating to more exotic factors such as credit and liquidity spreads, change in volatility, exposure to small versus large cap equities, various events etc. The beauty of this finding is that, through the use of advanced modeling techniques, these return drivers and risk factors can be systematically replicated using liquid and tradable financial instruments.
The beta replication approach allows for transparency (no black-box) and liquidity (no multi-month lock-ups or gates). And its biggest attraction: fee savings. Investors save a significant portion of fees which they would have incurred in a hedge fund-of-funds product. Beta replication thus provides return effectiveness and cost efficiency.
Together with a team of leading academic advisors and seminal authors in the alternative investment area, namely finance professors Bill Fung, David Hsieh and Narayan Naik, Blue White Alternative Investment Ltd. offers clients access to state-of-the-art implementation of one of the most exciting developments in recent alternative investment history.
The Blue White Alternative Beta Fund is currently available as:
EC on-shore fund (Finland)
Off-shore fund (Cayman)
Segregated managed account for major investors
Segregated client fund for major investors
Delta 1 notes & certificates, total return swap, leveraged products, principal protected structures(a capital guaranteed CPPI type 6-year note “Pharos” by Sampo / Danske Bank)