Hedge fund consultant Ian Morley has decisively deciphered hedge fund speak for the common man (make that investor).
As the founding chairman of the Alternative Investment Management Association, a London-based industry group, and chairman of HedgeInfo, the hedge fund research and ranking unit of London investment consultant Allenbridge Group PLC, Mr. Morley is well able to translate even the most arcane of hedge fund jargon.
He presented his translations of commonly used, always obscure phrases to a lunchtime audience at Fortis Prime Fund Solutions' May 13 conference in London. Among Mr. Morley's best definitions:
Challenging conditions: double-digit down month
Cautiously optimistic: single-digit down month
Constrained risk profile: we bottled it at the bottom
Alternative beta: punting in stuff we can't spell
Negative gamma: we lost money, but it wasn't our fault
Positive gamma: we lost money, but it wasn't our fault
Alpha: imaginary friends
Theta/Kappa: our research department has been on a junket
Negative correlation: everyone else made money
Prudent cut in leverage: we went to Antigua for our holidays
Reoptimized portfolio: we threw out the baby, bathwater and the bath
Modest outflows: they wanted to redeem the lot, but our small print is world class
Material outflows: would anyone like to reinvest in my new minicab venture? Christine Williamson