Alpha Exchange

Over a 15 year career at Deutsche Bank, Devin Anderson watched the pendulum of risk swing. Developing solutions for clients during the ultra-low vol period before the GFC, through the crisis itself and then again during the relatively benign periods of its aftermath, Devin has observed the tendency for modern markets to lurch from quiet to chaos. In the process, he’s had a front row seat in how various hedging strategies have performed and why. We explore the poorly timed decision by Calpers to unwind its hedging program just before the Pandemic related market sell-off in 2020, a discussion through which we learn more about Devin’s co-founding of Convexitas, an overlay manager working with clients to efficiently hedge risk.In Devin’s view, the “why” of tail hedging is clear: to realize explosive gains in down markets that can be used to fund purchases of newly cheapened assets. The hedge vehicle should generate and deliver cash at the right time and because of this, structure and implementation become importa