Small Is Beautiful for Hedge Funds in a Crisis, U.K. Study Finds


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A banker turned social finance entrepreneur. Liu-Yue built and managed two social enterprises. Liu-Yue founded Oxstones Investment Club a searchable cloud-based content platform for knowledge sharing and financial education. also provides global investors with direct access to U.S. commercial real estate investment opportunities and other alternative strategies. In addition, Liu-Yue also co-founded Cute Brands, Inc. Cute Brands is a cause-oriented character-based brand licensing and social impact fund that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising ultra high net worth clients on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in emerging markets bonds and Latin American equities investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities and special situation investing at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.

By Will Wainewright, Bloomberg,

Smaller hedge funds outperform larger ones, especially during times of market turmoil, research published by London’s City University showed.

The report by the university’s Cass Business School analyzed the performance of 7,261 funds from 1994 to 2014.

“On average investors were better off investing with a small hedge fund instead of a large one in times of crisis,” said researchers Andrew Clare, Nick Motson and Dirk Nitzsche. Smaller hedge funds performed better because they placed more restrictions on investor redemptions and investments were less correlated to market risk, they said.

The research also found a negative relationship between hedge fund age and performance.

“This result indicates that hedge fund managers do not age well,” it said.


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