Tail risk gets investors in a spin
Tue Jun 5, 2012
Tail-risk strategies are akin to insurance – something that should pay off big-style when there is a major market event
By Neil Wilson
With the ongoing political and economic crisis in the Eurozone
putting the markets back in a panic, it is not surprising there
has been such a surge of interest in so-called 'tail risk'
hedging strategies - whether offered by investment banks or,
increasingly, by hedge fund groups.
Volatility and tail-risk strategies together still represent
only a tiny proportion of total assets in hedge funds, but they
have clearly been much more on the radar screen for investors
ever since the credit crunch and ensuing financial crisis of
2008. However, whether - and/or when - they offer genuine value
to investors is something still to be proved.
At our recent EuroHedge Summit in Paris, we closed with a
panel session on volatility and tail-risk strategies -
providing an opportunity for a group of managers and experts in
the space to debate. And one of the first things that came
ISSN: 2151-1845 / CDC10004H
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