ALO25: Master Your Hedge Fund Allocation ft. John Jackson
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 715 Ratings
🗓️ 14 August 2024
⏱️ 65 minutes
🧾️ Download transcript
Summary
Join John Jackson, Global Head of Hedge Fund Research at Mercer, and Alan Dunne in this enlightening episode as they dive into the world of hedge fund selection! Discover how a leading institutional consultant selects hedge funds and builds robust portfolios. John shares his insights on why starting with manager selection is key to the portfolio construction process and how he integrates top-down considerations into the mix. The conversation delves into the roles different strategies play in a portfolio, how return expectations are set, and which strategies might thrive in a high-rate, volatile macro environment. John also takes us through Mercer’s rigorous process for researching and selecting new managers, what they look for in a manager, and potential red flags to watch out for. Plus, he sheds light on the importance of emerging managers, the AUM needed for a successful launch, and why he’s passionate about discovering these managers early on.
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Episode TimeStamps:
02:37 - Introduction to John Jackson
05:40 - A changed environment for hedge funds?
08:42 - Best strategies for a high rates environment
11:50 - Are clients stuck in the past?
13:40 - A framework for building hedge fund allocations
18:13 - More art than science
19:15 - Define your objectives clearly
20:51 - A multi-strat dominance - pros and cons
25:14 - Getting comfort in your hedge fund strategies
28:32 - How to incorporate diversifying strategies in your portfolio
30:48 - How Jackson approaches return expectations
33:13 - Typical number of managers
34:00 - The role of hedge funds
35:44 - Their process of selecting managers
38:56 - What makes an opportunity compelling to them?
43:28 - How they trade in the systematic space
45:10 - Quant managers - are they any different?
47:08 - AI and machine learning in the quant space
49:25 - How important is transparency?
50:54 - Their process of deselecting and changing their manager roster
54:07 - Identifying talents in the manager space
56:18 - How much capital is needed to launch a macro fund?
57:52 - The pros and cons of committees
01:00:21 - Getting through the committee
01:02:12 - Advice for other investors
Copyright © 2025 – CMC AG – All Rights Reserved
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2. Daily Trend Barometer and Market Score
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And if you are hungry for more useful resources from the trend following world...check out some precious resources that I have found over the years to be really valuable. Click Here
Transcript
Click on a timestamp to play from that location
| 0:00.0 | You know, I think I've tried every shortcut. |
| 0:09.0 | None of them have really worked. |
| 0:11.0 | And when it comes to edge fund investing, you have to do your work. |
| 0:16.0 | Otherwise, it's going to be surprises along the way, and they might be uncomfortable. |
| 0:23.5 | That's part of the reason why I like it is just because it's challenging. |
| 0:24.7 | Every day is kind of a challenge. |
| 0:30.2 | And even though you might have heard the same pitch ten times, you'll hear the 11th one, |
| 0:32.8 | and you're like, wow, this is really special, unique. |
| 0:36.4 | And, you know, I kind of want to go along for the ride here. |
| 0:41.9 | Imagine spending an hour with the world's greatest traders. |
| 0:46.4 | Imagine learning from their experiences, their successes, and their failures. |
| 0:48.4 | Imagine no more. |
| 0:51.1 | Welcome to Top Traders Unplugged, |
| 0:54.8 | the place where you can learn from the best hedge fund managers in the world, |
| 0:59.3 | so you can take your manager, due diligence, or investment career to the next level. |
| 1:03.3 | Before we begin today's conversation, remember to keep two things in mind. |
| 1:07.1 | All the discussion we'll have about investment performance is about the past, and past performance does not guarantee or even infer anything about future performance. |
| 1:12.4 | Also understand that there's a significant risk of financial loss with all investment strategies, |
| 1:16.7 | and you need to request and understand the specific risks from the investment manager |
| 1:21.3 | about their product before you make investment decisions. |
| 1:24.5 | Here's your host, veteran hedge fund manager, Niels Kostrup Larson. |
| 1:34.2 | For me, the best part of my podcasting journey has been the opportunity to speak to a huge |
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