Mast Investments outline how systematic investment processes seek to reduce behavioural biases while identifying opportunities created by technology-led market concentration and uneven growth.
Talent retention has always been a problem for the largest platforms as they scale. With more capital comes more responsibility but also more ownership: a desire for investment professionals to have agency over their IP. For Yung-Shin Kung, CIO of Mast Investments, this was a path he followed. Yung-Shin pioneered liquid alternative strategies at Credit Suisse and UBS, spending the best part of 30 years solely focused on their structure and implementation.
The decision to depart was built on a sense of changing times and wanting to remain at the forefront of the industry. “We left in 2024 because we wanted to focus on executing with speed and clarity, having an intense focus on where markets are going and how technology is evolving.” This evolution has seen many previously held assumptions retained by Yung-Shin at the beginning of his career, “The presumption for several years was that technology would make more and more data available. Actually, what’s occurred over the last decade or so is almost the exact opposite. The striking reality of the current situation is that data is becoming less available and more costly, especially clean data.”
This puts Mast Investments in a privileged position as a manager with a proprietary dataset curated over 30 years. Yung-Shin believes possessing this, and the fact that markets have entered a fundamentally different regime plays to the strength of the firm, “ One of the key tenets of what we try to do is remove human biases, a lot of what we’re seeing in markets is being driven by a post-covid growth cycle, which is very focused on technology and highly concentrated. When everyone is all in like this, there are going to be several losers,” he notes.
Exploiting this dispersion is central to the thesis of Mast Investments, maneuvering accordingly to identify pockets of growth and having the flexibility and programming to move out of turbulence. Additionally, the fund is also a significant proprietor of ETFs, valuing the different roles they can play for investors.“Fees are generally pretty clear and many, including ours, focus on a unitary fee rather than a management fee with a lot of expenses outside it. While liquidity problems, which can arise in hedge fund investments, are negated. ETFs are supported by the mechanism of having an exchange behind it and a lead market maker supporting liquidity.”
Going forward, Yung-Shin still views alternatives as a core portfolio allocation to investors, highlighting the importance of diversification, which is fundamentally about efficiency. “To the extent that alternatives offer uncorrelated returns and a reasonable return profile for those returns, they serve a very important role in a portfolio where traditional asset classes may now be a little more correlated and more sensitive to some of the secular headwinds confronting investors. We don’t think about this as a hedging strategy. We think about alternatives as a foundational strategy for a properly diversified portfolio.”
Watch the full alternative views interview below
