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Investing Outside The Box With Shana Sissel

Lead-Lag Live

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Is It Harder to Find Real Alternatives in the 40-Act Space?

The SEC relaxed the rules about use of leverage and shorting, I believe in 2007. Every asset management firm out there launched 130, 30, and 120 funds. They were just taking advantage of a rule and thinking that they could amplify their long returns with shorts. It turns out that most long only asset managers are really bad at shorting. So yeah, it's a lot harder. The asset managers who try to focus on this space tend to fail because alternatives haven't attracted assets at all.

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