A10113 Hedge Fund Management

The purpose of this course is to give participants a good understanding and workable knowledge of the techniques that should be part of the toolkit of anyone investing in alternative investments – and more specifically hedge funds – in their portfolios. 

At the end of the course the students should be able to:

- identify and select the hedge fund strategy most suitable for his investment criteria

- choose within a strategy the single hedge fund satisfying his requirements

- select investment strategies and tactics within a Macro Strategy  hedge fund 

The purpose of this course is to give participants a good understanding and workable knowledge of the techniques that should be part of the toolkit of anyone investing in alternative investments – and more specifically hedge funds – in their portfolios. 

At the end of the course the students should be able to:

- identify and select the hedge fund strategy most suitable for his investment criteria

- choose within a strategy the single hedge fund satisfying his requirements

- select investment strategies and tactics within a Macro Strategy  hedge fund 

This course will cover many important aspects and characteristics of hedge funds and the hedge fund industry.  It will treat the foundations and structures that are relevant for hedge funds.  It will also present major hedge fund strategies and describe operation, control, administration, and valuation issues.  Performance evaluation and investing in hedge funds from the investor's perspective will be discussed, and the use of leverage. The course aims at presenting the paradigm for making investment decisions with controlled levels of risk exposure. Broad topics include the hedge fund industry, arbitrage strategies, specific controlled-risk strategies (e.g., event-driven, long-short equity, convertible arbitrage, etc.), risk management, and performance measurement. We will pay attention to operational issues including implementation costs, leverage and the mechanics of stock lending.

We will involve the class in a portofolio simulation / game

§  Introduction     -   Hedge Funds today-   The key characteristics of modern hedge funds-   Hedge funds versus mutual funds-   The current state of the industry

§  Tools Used by Hedge Funds-   Buying and selling using a cash account-   Buying on margin-   Short selling and securities lending-   Derivatives-   Leverage

§  Hedge Fund Strategies-   Long/Short Equity Strategies-   Dedicated Short-   Equity Market Neutral-   Fixed Income Arbitrage-   Global Macro

§  Operational and Organizational Structures-   Legal structures for stand-alone funds-   A network of service providers (Sponsors, Investors, Investment Advisor, Brokers, Fund Administrator, Custodian, etc.)-   

§ Performance Measurement & Risk Management-   Net Asset Value and Returns;-   Measuring Risks-   Hedge funds benchmarks and indices

§  Investing In Hedge Funds-   The benefits of hedge funds (Superior historical risk/reward trade-off; Low correlation to traditional assets)-   The benefits of individual hedge fund strategies-   Diversification of risk

Traditional class lectures and an optional portfolio game. 

Final in-class exam