Tactical Portfolios: Strategies and Tactics for Investing in Hedge Funds and Liquid Alternatives

When economies are stable, traditional investing in stocks and mutual funds makes perfect sense. Everyone knows the good times can’t last forever, though. To stay afloat in any kind of market, the savviest investors use hedge funds and other alternative investments as part of their overall strategies. From the senior news editor of one of the most trusted news and research firms in existence, Tactical Portfolios is a field guide to weathering any kind of financial landscape through smart alternative investing.

Hedge funds and private equity are elements of any stalwart portfolio, but a wise and dynamic use of strategy is what sets the great fund managers apart from the rest. Not only does this book relate the basics of all the major hedge fund strategies, it also goes deeper, into the real value of these strategies under various conditions. This level of detail leads to the adaptability fund managers need to be successful. As hedge funds become more popular, clients and investors expect managers to react to change with justified strategies that work. In Tactical Portfolios, financial advisors and savvy investors learn how to approach due diligence in a way that optimizes risk for everyone.

Author Bailey McCann is the Senior News Editor for Opalesque, home of the widely read Alternative Market Briefing. The world’s top hedge fund managers are among Opalesque’s 50,000 subscribers, thanks to McCann’s incisive understanding of what makes equity investors tick. Markets are constantly fluctuating, but sound strategies and hedging fundamentals stay the same. Tactical Portfolios is a compendium of information and advice every emerging fund manager and investment advisor needs to make sense of hedge funds and liquid alternatives in the post-2008 climate.

A diversified hedge fund is a great bet for investors if it’s managed properly, but even the best managers aren’t immune to risk. After its sophisticated discussion of fund strategies and regulatory considerations, Tactical Portfolios reinforces the reader’s knowledge by addressing undue exposure to risk and how to avoid it. Real diversification, McCann explains, is all about identifying connections that inexperienced investors miss. Knowing what to do with this information is the mark of a successful fund manager and Tactical Portfolios can help you get there.

Praise for Tactical Portfolios

“In Tactical Portfolios, Bailey McCann brings clarity to the complex and often opaque world of hedge fund investments. Bailey’s erudite description of the main hedge fund strategies will quickly orient readers to the range of diversification and return characteristics attending these strategies. Topics ranging from the significance of third-party service providers to the role of new entrants, provide an advanced handbook for investors.”

—Lee Partridge, Salient Partners

“Bailey’s exposition of leading-edge aspects of specific hedge fund strategies is exceptionally sharp and timely. Tactical Portfolios goes deeper into the core of specific sources of Alpha for a diverse array of hedge fund investment styles and is at the same time broad enough in terms of coverage to be of interest to everyone in the hedge fund industry.”

—Nigol Koulajian, CIO and Founder, Quest Partners LLC

“Good work! A highly informative book covering a broad range of essential tactics for hedge fund investors. Experienced hedge fund investors and new hedge fund investors will both benefit from this book.”

—Jon Sundt, President, Chief Executive Officer, Altegris

“Using real world examples Bailey McCann has written a book that should be accessible and interesting for investors considering hedge funds for the first time. It is also a great read for experienced hedge fund professionals. As the founder of my own hedge fund I found interesting perspectives which I hadn’t considered. She covers a lot of topics in an engaging way.”

—Eli Combs, President, MeehanCombs

“Over the last ten years, Opalesque has published a large number of interesting interviews with the who’s who of hedge fund managers. This book walks through a number of hedge fund categories, where the strategy explanations are peppered with quotes from these conversations. Especially interesting are the chapters covering topics that aren’t frequently covered in other books, including emerging managers and service providers, as well as material covering changes in the global regulatory environment as recent as 2013. The coverage of these new and rapidly-changing topics alone makes this book worth a read.”

—Keith H. Black, PhD, CFA, CAIA , Managing Director, CAIA Association; co-author, CAIA Level I and II textbooks: Core Topics and Advanced Core Topics in Alternative Investments

“Tactical Portfolios is a must read primer for investors exploring opportunities in hedge funds and who want to develop a better understanding of the world of hedge fund investing. The environment is changing rapidly, and Bailey does a thorough job of highlighting the basics of various hedge fund strategies and the areas, such as due diligence, that are so important in the evaluation process.”

—William Lloyd, Managing Director, VelocityShares LLC

“In Tactical Portfolios: Strategies and Tactics for Investing in Hedge Funds and Liquid Alternatives, Bailey McCann provides a brilliant guide to the complex world of hedge funds. From new innovative investment strategies to the ever-evolving regulatory environment, McCann presents a straightforward explanation of the industry written so that nearly anyone can understand it. I highly recommend it.”

—Mitch Ackles, President, Hedge Fund Association

“An investment of $100 in the S&P 500 Index in January 2000 stood at $126 by the end of 2013. $100 invested with the average hedge fund manager stood at $226 by the end of 2013. This book is a timely reminder as to why an investment style that involves risk management and hedging is superior to an investment style that doesn’t.”

—Alexander Ineichen, Founder, Ineichen Research and Management, author of Asymmetric Returns