The National Strategic Investment Dialogue, 2005

The National Strategic Investment Dialogue (NSID) is an annual national series of discussions among fiduciaries and leaders of the investment community to address issues of vital importance to institutional investors. During 2005, the focus of the program was:

Absolute Returns, Relative Risks:
The Changing State of the Art in Strategies for Investing in Hedge Funds

The National Strategic Investment Dialogue (NSID), a series of two separate day-long discussions held in Washington D.C. and San Francisco, brought together selected groups of respected fiduciaries and leaders of the investment community. The purpose was to examine and debate the challenges and complexities associated with harnessing the benefits of hedge funds, including exploring emerging opportunities of alpha and advanced portable alpha techniques.

During each session, program participants gauged the baseline expectations of the group, such as expectations for returns, risks and challenges currently posed by hedged approaches to investing; understanding how the underlying trends toward securitization of assets and the associated processes of decoupling and re-coupling alpha and beta are likely to develop; exploring the practical realities, pitfalls and success stories associated with the implementation of such strategies by respected investors, and making sense of the welter of apparent and more hidden risks associated with such strategies both for investors and for markets as a whole. In addition, the program explored how hedging impacts other elements in each portfolio, the potential future application of hedging strategies for alternative investment classes, and ultimately, it helped identify the most desirable and effective strategies for using these techniques to achieve institutional return targets. The 2005 program systematically explored these critical areas of interest via the unique approach and format that made the 2004 program so rewarding.

Participants were culled from a variety of organizations and represented a broad range of investment professionals, including money managers, plan sponsors, foundation and endowment investors, board members, and third-party service providers. Collectively, the participants represented approximately two trillion dollars of pension, foundation, endowment and managed assets.