Today, on Bloomberg TV’s ‘Money Moves’, host Deirdre Bolton sat down with Bob Rice of Tangent Capital Partners for a segment called ‘Bob’s Buzz Words.’
The term of the day was ‘overlay’ and Rice especially focused on what that means in the hedge fund world.
If you’ve never heard of it before, in brief, it’s when you design a new group of investments to compliment a group of investments you already had — either to reduce that initial group’s risk, or to juice them up a bit.
That’s interesting, but what was even more interesting was the anecdote Rice shared about someone using the strategy.
Rice said that when Ray Dalio started Bridgewater, he mostly offered clients overlays so that they could turn hum-drum investments into Alpha generating power houses.
Watch the video below: