In this episode, Alexander de Bruin, Head of Fund Research at Edmond de Rothschild, joins Alan Dunne to discuss the art and science of selecting managers and building portfolios of alternatives. Alexander shares insights from his background in convertible bond trading and how it has shaped his approach to allocating capital. The conversation explores the rapid growth of private markets, with a focus on the current opportunities in private credit. They also delve into Alexander's framework for constructing hedge fund portfolios, examining the role of multi-manager, multi-strategy funds compared to other diversifying strategies. Alexander provides a behind-the-scenes look at his manager due diligence process, including his unique approach of sitting on the trading floor with hedge fund managers to gain a deeper understanding of their strategies.
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Episode TimeStamps:
02:26 - Introduction to Alexander de Bruin
09:08 - The clients and portfolios that Edmond de Rothschild
13:24 - Should the 60/40 portfolio be revamped?
15:45 - de Bruin's approach to implementing new strategies
19:46 - How de Bruin deal with the paranoia of something going wrong
22:33 - Is there a place for multi-strat approaches?
25:14 - The challenges of managing risk as a multi-strat manager
26:59 - How hedge funds deal with portfolio constraints
29:25 - Opportunities and risks in private markets
35:37 - How high yield portfolios are allocated
37:31 - Which managers do they prefer?
39:49 - How to assess hedge funds as a manager and vice versa
44:51 - How de Bruin uses his backgammon experience when selecting managers
47:54 - Move the managers to where there is more edge
50:05 - Where does the disappointment in hedge fund allocation stem from?
53:36 - Are hedge funds becoming more open to high volatility strategies?
54:49 - What are Edmond de Rothschild looking for in managers?
56:41 - Advice for other investors
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