Introduction to Alternative Investment Strategies

Timothy Peterson

According to a 2013 survey by Natixis Global Asset Management, 74% of clients say their financial advisers are talking to them about alternative investments. In 2012 that number was 35%, and just 19% in 2011. The same survey indicated that 61% of investors do not believe the traditional mix of equities and bonds for portfolio allocation is the best way to manage investments in order to achieve their financial goals. Clearly there has been a shift in industry thinking about alternative investments that has made its way to the public. Investment managers will, in the coming years, be faced with the challenges of reporting how these unique investment opportunities have performed, and that is the purpose of this book.

OVERVIEW OF THIS BOOK

This book is organised into two sections. Part I covers the mathematics and mechanics of the performance measurement calculation and follows a progression. Chapter 2 begins with an overview of the rate-of-return calculation and various methods that are commonly used. In Chapter 3 we examine leverage further to explain how it affects return, and also provide an accounting approach to serve as a general model for calculating the performance of