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January 18, 2005 at 07:00 PM
NEW YORK (HedgeWorld.com)–Part of Merrill Lynch Investment Managers’ 2005 strategy is to design for institutional clients portfolios that extract alpha returns from a variety of asset classes and hedge out the market risk, executives said at a press meeting.
The search for alpha continues to blur the lines between traditional investments and alternative strategies, but long-only equity and active fixed income still account for more than 60% of institutional assets that become available every year to be managed by third parties, said Jamie Kase, head of MLIM’s Americas institutional unit.
Whereas in the past 20 years most institutions were able to make enough money by going with the market, these beta returns have been squeezed in recent times. As a result there is demand for more alpha, regardless of the source, he said.
If returns are anemic, the ability to identify and find alpha will be of prime interest to clients, said MLIM President and Chief Investment Officer Robert Doll. Part of the returns to be had from core equity and bond portfolios is of this kind.
