Bio-folio: applying portfolio theory to biodiversity

Genes, species and ecosystems are often considered to be assets. The need to ensure a sufficient diversity of this asset is being increasingly recognised today. Asset managers in banks and insurance companies face a similar challenge. They are asked to manage the assets of their investors by constructing efficient portfolios. They deliberately make use of a phenomenon observed in the formation of portfolios: returns are additive, while risks diversify. This phenomenon and its implications are at the heart of portfolio theory. Portfolio theory, like few other economic theories, has dramatically transformed the practical work of banks and insurance companies. Before portfolio theory was developed about 50 years ago, asset managers were confronted with a situation similar to the situation the research on biodiversity faces today. While the need for diversification was generally accepted, a concept that linked risk and return on a portfolio level and showed the value of diversification was missing. Portfolio theory has closed this gap. This article first explains the fundamentals of portfolio theory and transfers it to biodiversity. A large part of this article is then dedicated to some of the implications portfolio theory has for the valuation and management of biodiversity. The last section introduces three development openings for further research.

Do benchmark African equity indices exhibit the stylized facts?

This paper investigates if benchmark African equity indices exhibit the stylized facts reported for financial time-series returns. The returns distributions of the Africa All-Share, Large, Medium and Small Company Indices were found to be leptokurtotic, had fat-tails, over time experienced volatility clustering and exhibited long memory in volatility. Both the All-Share and Large Company Indices were found to exhibit leverage effects. In contrast, positive shocks had a greater impact on future volatility for the Small Company Index which implies a reverse leverage effect. This finding could reflect a bull/bubble market for small capitalisation stocks in Africa.

Recognising Ecological Contexts of Diverse Ethnic Groups: Experiences of British-Indian Adult Children of Divorce

The process of divorce as a family change process including outcomes and consequences has received considerable research attention in the western context. However, the experience of divorce for children within specific ethnic contexts has been rather limited leading to poor planning and practice provision with diverse families. By drawing upon an empirical qualitative study of British Indian adult children, this paper will make a case for recognising diverse needs within specific historical, socio-cultural and developmental contexts. There is a need to acknowledge these contexts in policy design to establish practice that is flexible, accessible and relevant to the needs of different and diverse communities. Results indicate that areas of impact may be similar to those identified by other studies within the literature review. However, the experiences, expressions, implications and larger consequences of impact are located within specific socio-cultural contexts. In support of this, major findings of the study (outlined below) will be discussed - Context: patriarchy, stigma, immigration; Impact: economic, social, emotional, career/education, physical; Coping: psychological strategies, physical strategies, social strategies, sources of support.