Acadian paper highlights extension strategies

Investment manager Acadian Asset Management has released a new paper, identifying the differentiation of strategies that improve risk-adjusted performance from those that simply amplify active risk as one of the biggest challenges for professional investors.  

The paper says that shifting investment conditions and the search for alpha have the potential to push investors up the risk spectrum, with concentrated equity strategies as a prime example.  

It highlights the case for systematic extension strategies, such as 130:30 long/short strategies that relax the long-only constraint and potentially exploit mispriced assets.