The recent outperformance of global equities has some investors wondering whether they should reduce their allocations to hedge funds. The announcement from CalPERS to end its hedge fund program cited low returns and high fees, but is that the whole picture?  Sorting out sources of hedge fund performance is particularly important given the recent focus of many institutional investors on factor-based investing.  In this Research Insight, we identify the role that factor exposures...

Global private real estate represents significant opportunities for investors, but also major challenges, similar to global equity 30 years ago. A lack of information, and the smoothness of appraisal-based valuations, have left investors and risk managers guessing about the behavior of global real estate: a wide-range of speculation is commonplace, including the view that real estate is a low-risk, high-return diversifier. In this Model Insight, we shed light on this misunderstood asset...