Alternative Beta Strategies and Hedge Fund Replication

It has long been recognized that a main part of a Hedge Fund's s return corresponds to risk premiums rather than market inefficiencies, i.e. from "beta" instead of "alpha". This has some implication for the industry, among which the most striking is the endeavor to construct investable benchmarks for hedge funds on the basis of an analysis of the underlying systematic risk factors and a subsequent replication of the corresponding risk premiums with generic trading systems.

This book reflects on this most recent and increasingly popularized discussion within the global hedge fund industry on "replicating hedge funds", a topic that has the potential turn the hedge fund industry upside down. It provides a thorough overview of the latest practices in hedge fund replication and alternative beta strategies in the constantly changing world of hedge fund investing, and describes and addresses the opportunities and challenges that lie therein.