We believe equity markets to be reasonably efficient, to the point where, while some managers still deliver alpha in the short-term, over the long-term the execution and the management costs of these strategies often outweigh the performance benefits for the investor.
In addition, the returns of traditional asset classes have become increasingly correlated in recent years, greatly reducing the diversification benefits of traditional real estate investment vehicles such as REITS. Moreover, studies have shown that the correlation between traditional asset classes increases when market are going down, meaning that the apparent portfolio diversification may well go away when you most need it.
We wanted to reliably diversify our sources of income and started Orbis investing our own monies into alternative strategies we believed in. We believed these alternative strategies could provide the sustained returns and the increased portfolio diversification we were seeking. We tested, seeded and developed various alternative investment strategies.