Trends Watch: October 26, 2017

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks to Nick Vasserman, CIO, Momenta Capital Management, LLC.

What is your outlook for alternatives?

We are particularly bullish on the growth of alternatives in terms of both broad industry AUM market share and performance.  There are several secular trends driving this:

1. Broad financial theory and the growth of beta vs alpha: Recent academic and industry research documents the persistence of structural factors driving directional and relative returns across all liquid asset classes.  Increasingly innovative passive and active vehicles are becoming available to directly access global and bespoke investments.
2. Technology and Data: The growth in alternative data, advances in machine learning, data storage and powerful open source software facilitate a highly efficient fundamental and quantitative analysis of any market with greater transparency and lower costs that are increasingly passed on to investors.   

What is your outlook for the economy?

We tend not to have long-term macro views as our investment horizons are typically shorter term from several days to weeks. We focus on thematic ideas as well as tactical and opportunistic trades with a desirable risk-reward ratio.  There are several carry, value and momentum themes we particularly like in rates, commodities and credit markets as well as shorter term relative value opportunities across global equities indices and G-10 currencies.

What keeps you up at night?

We are highly focused on our objectives to deliver consistent and uncorrelated returns to our investors.  As such as we are concerned with the greater frequency of occurrence of extreme and historically rare events such as weather, geopolitical, technology, and behavioral-driven incidents leading to discontinuities in market pricing and liquidity.  We always argue that markets are non-stationary in that they are continuously undergoing structural changes and believe the future occurrence of such events will persist and even increase. Common sense risk management is critical and we continuously challenge and refine our risk management policies, procedures and metrics to ensure we can fulfill our fiduciary responsibilities to our investors.

Momenta Capital Management based in Greenwich, Connecticut, was established in 2016 and plans to launch its flagship Integrated Alpha Fund in Q1 2018. The offering is a systematic global alpha fund focused on structural and tactical opportunities across multiple and liquid asset classes. It will combine fundamental analysis, machine learning and big data across six uncorrelated portfolios.