American Beacon Advisors showed off its broad range of funding strategies and sub-advisors, and held a lively panel discussion on investment opportunities at its Oversight 360? First Annual Investment Forum on Wednesday, June 16, in New York.
American Beacon President and CEO Gene Needles, led the forum with a humorous touch and a quick pace, which prevented the investment managers from lapsing into too much data-driven chatter.
Needles introduced the opening speaker, Dr. Zhiwu Chen, a professor of finance at the Yale School of Management. Needles joked that if those credentials weren’t impressive enough, Chen proved it during rehearsal, saying, “He was the only one who could figure out the laser pointer.”
Chen, a founding partner of Zebra Capital Management along with Roger Ibbotson, spoke about Zebra’s two funds unveiled June 1and its liquidity-based investment philosophy, which he insisted was “not a repackaged version of value investing.”
Chen said many fund managers had a missing element in their strategies compared to Zebra’s large cap and small cap equity funds.
“If you look at the basic two-dimensional graph taught at MBA programs that measured return versus risk,” Chen said, while deftly focusing the laser pointer at the screen, “the missing dimension was liquidity.”
Chen said private equity was very illiquid, and “If the economic crisis taught us anything, illiquid instruments are not what you want.”
However, the Zebra mutual funds, launched through American Beacon earlier this month based on the Chen-Ibbotson research, use relative liquidity to capture the premium of slightly-less liquid stocks in a portfolio.