Product Description

In Asymmetric Returns, financial expert Alexander Ineichen elevates the critical discussion about alpha versus beta and absolute returns versus relative returns. He argues that controlling downside volatility is a key element in asset management if sustainable positive compounding of capital and financial survival are major objectives. Achieving sustainable positive absolute returns are the result of taking and managing risk wisely, that is, an active risk management process where risk is defined in absolute terms and changes in the market place are accounted for. The result of an active risk management process–when successful–is an asymmetric return profile, that is, more and higher returns on the upside and fewer and lower returns on the downside. Ineichen claims that achieving Asymmetric Returns is the future of active asset management.

Alexander M. Ineichen, CFA, CAIA, is Managing Director and Senior Investment Officer for the Alternative Investment Solutions team, a key provider within Alternative and Quantitative Investments, itself a business within UBS Global Asset Management. He is also on the Board of Directors of the Chartered Alternative Investment Analyst Association (CAIAA). Ineichen is the author of the two UBS research publications In Search of Alpha—Investing in Hedge Funds (October 2000) and The Search for Alpha Continues—Do Fund of Hedge Funds Add Value? (September 2001). As of 2006 these two reports were the most often printed research papers in the documented history of UBS. He is also author of the widely popular Absolute Returns—The Risk and Opportunities of Hedge Fund Investing, also published by John Wiley & Sons.

Product Details

• Amazon Sales Rank: #272347 in Books
• Published on: 2007-01-09
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 352 pages

From the Inside Flap
In order to meet the demands of the investment community, the asset management industry has to continually evolve. Around the year 2000, the latest phase of this evolution began to take place. During that time, hedge funds started to seriously compete with the traditional asset management industry—especially for institutional assets. Since then, investors have distinguished more carefully between alpha and beta, absolute returns and relative returns, and skill–based strategies and market–based strategies.

Author Alexander Ineichen has been on the cutting–edge of the money management industry throughout his entire career. He knows how difficult it is to find alpha in today′s increasingly efficient markets, but he also understands how the current paradigm shift in the field of finance can help you overcome this obstacle.

Filled with in–depth insights and expert advice, Asymmetric Returns claims that it is possible for an active investment approach to yield a higher and more sustainable long–term return with lower downside volatility than is obtainable through passive, long–only strategies. The term asymmetry refers to most investors preferring positive returns over negative returns, that is, a return distribution skewed to the "upside."

In essence, Asymmetric Returns is a manifesto for active asset management. Written in a straightforward and accessible style, this comprehensive guide reveals what it takes to achieve an asymmetric return profile—including an entrepreneurial mindset as well as a dynamic and flexible risk management process that truly corresponds to the end investors′ risk preferences—and outlines the essential elements of this innovative investment approach.

Topics discussed within these pages include:

• The importance of understanding and managingportfolio volatility
• The issue of risk and transparency in today′sinvestment environment
• The price of asymmetric returns
• How alpha is an option from the perspective of an investor
• Asymmetric returns as a business
• The current conversion between the absolute returnworld (investment banks, hedge funds) andtraditional asset management

The future of active asset management will rely more on finding and exploiting investment opportunities where the risk/reward relationship is asymmetric and less on beating an arbitrary benchmark. With Asymmetric Returns as your guide, you′ll discover how to do this and much more, as you work to achieve sustainable positive absolute returns through an active risk management process.

From the Back Cover
Praise for Asymmetric Returns

"Ineichen is a brilliant thinker and a beautiful writer. The result is this extraordinary book. Asymmetric Returns offers powerful and innovative investment advice in a language every investor can read. What a tempting combination! This book is one temptation you must not resist."
—Peter L. Bernstein, author, Capital Ideas: The Improbable Origins of Modern Wall Street

"Alexander Ineichen remains at the leading edge of the hedge fund industry. But what really distinguishes him from other industry pioneers and commentators is his ability to articulate major changing themes in a way that is colorful and comprehensible to many readers. This book is a must–read for practitioners and major customers in the industry."
—Stanley Fink, Chief Executive, Man Group plc

"This book is a must–read for today′s professional investor. Alexander Ineichen goes way beyond the typical debate in the money management industry in regard to alternative investing or traditional investing. He explains the various concepts and concludes that at the end there is only one thing that matters: positive absolute returns."
—Rainer–Marc Frey, founder, Horizon21 and RMF

"This book is thoroughly entertaining, thought provoking, and deeply insightful. Ineichen leads the reader between the abstract and the concrete in a splendid fashion. A compelling addition to any bona fide financial athenaeum."
—Joseph Scoby, member of UBS′s Managing Board and head of Alternative and Quantitative Investments, UBS Global Asset Management

"Ineichen is clearly the thought leader on asymmetric returns. For example, his discussion in Chapter 3 on the pricing of asymmetric returns and his analysis of higher moments of the distribution in Chapter 4 provide ample food for thought upon which investors can feast for years to come."
—Mark Anson, Chief Executive Officer, Hermes Pensions Management Ltd.

About the Author
Alexander M. Ineichen, CFA, CAIA, is Managing Director and Senior Investment Officer for the Alternative Investment Solutions team, itself a business within UBS Global Asset Management. In October 2000, Ineichen authored In Search of Alpha: Investing in Hedge Funds, which has become the most often printed research publication in the documented history of UBS Investment Bank. He has published several papers in peer–refereed financial journals, contributed numerous articles and chapters to financial newspapers, magazines, and books, and regularly speaks at industry conferences. Ineichen is also on the Board of Directors of CAIAA (Chartered Alternative Investment Analyst Association) and is the author of the widely popular Absolute Returns: The Risk and Opportunities of Hedge Fund Investing (Wiley).

Customer Reviews

Insightful thumbsucker on money management
The main theme of this dense book is the future of the asset management industry. Alexander M. Ineichen claims that the investment business has undergone a paradigm shift, away from buy-and-hold and toward absolute-return investing. He explores the origins and implications of this shift in considerable detail and enjoyable prose. But, beware, this is not a book for beginners or generalists. Even close students of finance may find it difficult to follow the author's argument through his many detours and tangents (interesting as they are). Ineichen is an ardent fan of high-risk, high-leverage hedge fund investing, so his book will be controversial in the post-subprime-crisis atmosphere, where that kind of investing has fallen from grace. Ineichen quotes John Maynard Keynes as saying, "When circumstances change, I change my view. What do you do?" Published in 2007, the book references the equity market bubble of 1995 to 2000 as the most recent instance of large-scale market inefficiency, but getAbstract wonders whether the author would change his view after the much more consequential financial collapse of 2008.