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Bloomberg Markets Magazine

Bloomberg Markets Magazine February 2015

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Country:
United States
Language:
English
Publisher:
Bloomberg Finance LP
Frequency:
Back issues only
$9.99

in this issue

4 min
scouting talent

MARTIN SASS MANAGES $7 billion at M.D. Sass, the New York–based investment firm he started in 1972. When he’s not picking stocks, he has a sideline: seeding investment managers. During the past 42 years, he’s helped launch and nurture 29 hedge funds, private-equity vehicles and investment strategies that oversee more than $30 billion, by his reckoning. “I did it before I even knew it was an incubator,” Sass, 72, says. Among the firms Sass has invested in are Waterfall Asset Management LLC, an asset-backed hedge fund, and Amerra Capital Management LLC, a private-equity firm focused on agricultural commodities. M.D. SASS NOW has a team of five people who scour Wall Street for talented managers and winning strategies. Often, deals start with a couple of people who need capital and infrastructure to get an…

1 min
private-equity strategies

M.D. Sass has used a private-equity structure to take stakes in a variety of investments, including commodities, financial services and asset-backed securities. You can use tools on the Bloomberg Professional service to see which strategies are attracting money in the private-equity sphere. Type PE for the Private Equity Overview page. Under Fundraising in the left column, click on Funds In Market. As of early December, there were 1,978 funds in the capital-raising stage. The histogram shows that buyout strategies had attracted the most money at $247.7 billion. Click on the Commitments tab to see a list of investors, which are largely pension and retirement funds.…

17 min
the coyotes and the banks

DIONISIO DIAZ TAKES A SEAT inside the Evangelical Christian Assembly Church at an office park in Doraville, an Atlanta suburb. It’s been another sixday week working for a landscaping crew, mowing lawns and pruning shrubs. The 37-year-old undocumented immigrant from Guatemala clutches a Bible and joins dozens of worshipers belting out a hymn in Spanish. As the Saturday evening service in late October ends, Diaz, wearing a black suit, rises to greet the pastor. “My dream is to be up there, spreading the Gospel, just like you,” Diaz says, a smile widening across his face. “I’ve been blessed by God to get here.” Diaz has also been helped on his journey to the U.S. by more-earthly powers: He hired a gang of human smugglers, or coyotes, who got him across the U.S.…

1 min
blowing up atms

THE APPROACH Crooks seal the vents and cracks of an ATM with duct tape, inject propane into the machine through a hose and then ignite the fuel with a spark. Amazingly, the technique leaves the cash almost entirely intact. THE NUMBERS 375: Attacks on ATMs through the first nine months of 2014 7,877: Number of working machines, down 15 percent since March 2013 $30,000: Cost of a security enhanced ATM 17: Percentage of time that Chilean ATMs were empty in September THE IMPACT Banks aren’t replacing ATMs when they’re destroyed, making withdrawals a test of endurance in Latin America’s wealthiest nation. “Letting the number of ATMs fall is a way for the banks to force people to turn to plastic, cut costs and force smallstore owners to set up creditcard-transaction machines, on which they charge commissions,” says Congressman…

7 min
how to minimize geopolitical risk

POLITICAL EVENTS AROUND the world can buffet investments. Consider a portfolio that has exposure to Russia: the iShares MSCI Emerging Markets Eastern Europe ETF, for example. The exchange-traded fund, which is based on an MSCI Inc. index, holds stocks of companies based in four countries: Russia, Poland, Czech Republic and Hungary. Back in 2012, the ETF tracked the performance of a fund that holds Western European stocks, the iShares MSCI Europe UCITS ETF. You can use the Portfolio & Risk Analytics (PORT) function to compare the two funds. To do that, type ESR US PORT . Click on the arrow to the right of Vs and select [More Sources …]. In the Select Benchmark window, click on Funds/ETFs/13Fs. In the ADD FUND, ETF OR 13F field, enter IMEU LN and click on…

2 min
what are factor models?

Factor models break down the return and risk of a security into so-called factors that drive its performance and volatility. Such models simplify analysis that would otherwise require calculating covariances—measurements of the degree to which two variables move together—among all of the securities in a portfolio. The approach is intuitive: The price movement of Coca-Cola Co. shares on a given day, for example, to some extent reflects the performance of the broader U.S. stock market. Thus, the U.S. market can be considered a factor that drives the performance of the beverage company’s stock. A relatively small number of factors can explain the risk and return of millions of securities. And, importantly, factor models provide tools that you can act on. Factor models can help you determine whether you want to increase…