Alec Litowitz's Invest For Kids Chicago Presentation

We're posting up notes from the Invest For Kids Chicago Conference 2017.  Next up is Alec Litowitz of Magnetar Capital.


Alec Litowitz's Invest For Kids Chicago Presentation

A new age of decomposition in investing is upon us.  "The long-only paradigm shift" - smart beta, ETFs, etc - is an accelerating trend.

Asset classes and asset allocation now factor investing.  Active is not dead, but active will continue to lose share and get to < 50% share.

A more complete alternative return framework - alternative risk premia 3.0.

Looking at monthly data from 602 significant, durable hedge funds: 50% alpha, beta 40.9%, smart beta 1%, alternate risk premia 7.6%.


For more from this event, check out the rest of the presentations from Invest For Kids Chicago 2017.

Hedge Fund Magnetar Capital's Letter to Investors Re: CDOs

John Gapper from GapperBlog at the Financial Times has just posted up hedge fund Magnetar Capital's latest letter to investors. If you peruse our 'What We're Reading' links that we post up each week, you'll recall that recently we linked to a ProPublica piece on Magnetar Capital and how they profited from the subprime trade. Needless to say, Magnetar wasn't too pleased with that and has fired back a retort, deeming the story misleading.

To follow the timeline accordingly, we of course recommend reading ProPublica's piece on the hedge fund first. Then, once you've finished, head down the page to read hedge fund Magnetar Capital's penned assault on ProPublica's story.

Embedded below is Magnetar's letter to investors, courtesy of John Gapper at the FT:



You can directly download a .pdf here.

It's obvious that Magnetar is rightly concerned with how they are being portrayed at a time when Goldman Sachs has come under siege for actions relating to their collateralized debt obligations (CDOs). Magnetar profited off of subprime's downfall much like John Paulson's hedge fund Paulson & Co did. This is certainly the time to 'set the record straight' to avoid any confrontations with the SEC now that the regulatory body seems to be on a CDO-related witch hunt.

In any event, an interesting read from Magnetar in their latest letter to investors. We haven't covered much of the Goldman Sachs fraud case as the SEC examines deals done with John Paulson's hedge fund. We figured we'd let the mainstream media cover that as the information flow has been non-stop. But if you want to learn more about Paulson's subprime trade, we highly recommend Gregory Zuckerman's The Greatest Trade Ever, which has intriguingly been a source of information regarding the recent CDO witch hunt.