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While new offerings could help replenish companies' coffers, the listings also may provide investors with a new source of returns.
Such plants are costly to operate, and Brazil's regulatory structure does not yet provide companies with a safe source of returns.
"You're competing in a market with high-speed and hedge fund traders, and they have volatility strategies as a source of returns," Mr. Roth said.
We have not circumscribed their gambling – indeed, they have access to funds from the Fed at close to zero interest rates, and it appears that "trading profits" have (besides "accounting" changes) become the major source of returns.
Introducing this into the model would require identifying the source of returns to experience: participation or hours; as well as requiring the inclusion of an additional margin of adjustment: intensive labour supply decision.
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Mark Anson, chief executive of Hermes, a British group that manages pension assets for BT, a telecoms operator, says hedge funds offer a source of return that does not necessarily move in step with share and bond markets.A genuinely diversified source of return is the one "free lunch" available from the investment world.
There is no point in diversifying if the investment does not offer a genuinely different source of return (much of private equity falls into this category) or if the asset is already overvalued.Yet even allowing for this, diversification has surely not offered the benefits most pension funds expected.
Furthermore, diversification across sources of returns and risks based on entropy indexes is another pivotal aspect in portfolio management.
As pension funds sank into deficit, they started looking for alternative sources of return.Hence the astonishing growth of hedge funds.
It is hardly surprising that pension funds, insurers and endowments are searching for new sources of return.Step forward "smart beta", the latest bit of jargon from the fund-management industry.
Hence the phrase "alternative beta", which refers to non-traditional sources of return, such as taking advantage of changes in market volatility, or exploiting gaps between the spot and futures prices of commodities.In this section A hiker's guide to Japan Investing for kicks Can pigs fly?
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