Innovation can help drive higher risk-adjusted returns


Innovation can help the alternative investment sector achieve higher risk-adjusted returns and in many ways this should be viewed as the holy grail of innovation.

That was one of the key messages delivered by a panel of speakers at the Cayman Alternative Investment Summit (CAIS), which is taking place in the Cayman Islands this week.

The panel of experts included Valerie Sill, president, CEO and CIO of Dupont Capital Management; Max Darnell, managing partner and CIO of First Quadrant; Ron Barin, vice president and CIO at Alcoa Corp; and Gary Brown, CEO of CMG Life Services. The session was chaired by William Kelly, president and CEO of CAIA Association.

The session, called 'Innovations in Asset Allocation' covered new forms of asset allocation, harnessing the power of the emerging risk factor diversification, and going from relative to absolute returns. It also looked at what innovations are most likely in the alternative space, distinguishing between creating new products and improving the key features of the existing products.

The chair noted the health of the alternative investment sector and especially the health of the sector on Cayman where around 11,000 funds are now registered. But the panel agreed that innovation around things like big data and artificial intelligence will ultimately transform many aspects of the industry.

Several panellists stressed that it is vital managers get asset allocation right as that is an innovation that needs to come. Some parts of the industry need to get back to basics and be innovative using insight driven strategies, they added.

Now in its fourth year, CAIS is a not-for-profit event hosted by Dart which uses its experts and expertise to benefit philanthropic efforts both in Cayman and internationally. Its keynote speakers this year included Arnold Schwarzenegger, the former Governor of California, Captains Mark & Scott Kelly, former NASA astronauts & retired US Navy Captains; and retired DEA agents Stephen Murphy & Javier Pena, responsible for apprehending the infamous drug lord Pablo Escobar.

CAIS 2017, Cayman Islands, Innovation, Asset Allocation

Cayman Funds