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Investing in Hedge Funds, Revised and Updated Edition

Book Description

Hedge funds are in the news and on the minds of sophisticated investors more than ever. Investors have questions about how the funds are structured, where the assets are allocated, and whether hedge funds can truly act as a hedge against market risk. The answers are all here in Investing in Hedge Funds.

Until recently, much of what makes hedge funds tick has been closely guarded--the intellectual property of Wall Street's investment elite. In this updated and revised text, Joseph G. Nicholas, founder and chairman of the leading industry information provider Hedge Fund Research, Inc., travels inside the hedge fund marketplace to explain the alternative investment strategies of top fund managers, providing clear descriptions of how to access these funds and where they're headed. It's a complete guide that everyone investing in hedge funds should study closely.

Table of Contents

  1. Praise
  2. Title Page
  3. Copyright Page
  4. Dedication
  5. Acknowledgements
  6. Introduction
    1. THE STRUCTURE OF THIS BOOK
  7. PART I - Keys to Understanding
    1. CHAPTER 1 - What Is a Hedge Fund?
      1. HEDGE FUND STRATEGIES
      2. HEDGE FUND MANAGERS
      3. HEDGE FUND INVESTORS
      4. THE HEDGE FUND DYNAMIC
      5. HEDGE FUND INDUSTRY CHARACTERISTICS
      6. NUMBER OF FUNDS/GROWTH
      7. ASSET SIZE OF FUNDS
      8. AGE OF FUNDS
      9. INDUSTRY PERFORMANCE
      10. WEALTH PRESERVATION
      11. DRAWDOWNS
      12. DYNAMIC NATURE OF PERFORMANCE
    2. CHAPTER 2 - The Hedge Fund Investment Structure
      1. COMMINGLED INVESTMENT VEHICLES
      2. SEPARATE MANAGED ACCOUNTS
      3. CHOOSING AN INVESTMENT VEHICLE
      4. FUND OF FUNDS
      5. REPORTING AND DISCLOSURE
      6. LIQUIDITY
  8. PART II - Investing With Knowledge
    1. CHAPTER 3 - Hedge Fund Strategies
      1. TOOLS AND TECHNIQUES
      2. INVESTMENT INSTRUMENTS AND MARKETS
      3. PERFORMANCE
      4. HEDGE FUND STRATEGIES
      5. FIXED-INCOME ARBITRAGE
      6. EQUITY MARKET-NEUTRAL (STATISTICAL ARBITRAGE)
      7. CONVERTIBLE ARBITRAGE
      8. MERGER (RISK) ARBITRAGE
      9. DISTRESSED SECURITIES
      10. EVENT-DRIVEN STRATEGIES
      11. MACRO INVESTING
      12. SECTOR
      13. EMERGING MARKETS
      14. SHORT SELLING
      15. UNIVERSE OF HEDGE FUND STRATEGIES
    2. CHAPTER 4 - Fixed-Income Arbitage
      1. CORE STRATEGY
      2. INVESTMENT PROCESS
      3. ADVANTAGES/DISADVANTAGES
      4. PERFORMANCE
      5. SUMMARY POINTS
      6. KEY TERMS
    3. CHAPTER 5 - Equity Market Neutral
      1. CORE STRATEGY
      2. INVESTMENT PROCESS
      3. ADVANTAGES/DISADVANTAGES
      4. PERFORMANCE
      5. SUMMARY POINTS
      6. KEY TERMS
    4. CHAPTER 6 - Convertible Arbitrage
      1. CORE STRATEGY
      2. INVESTMENT PROCESS
      3. ADVANTAGES/DISADVANTAGES
      4. PERFORMANCE
      5. SUMMARY POINTS
      6. KEY TERMS
    5. CHAPTER 7 - Merger (Risk) Arbitrage
      1. CORE STRATEGY
      2. INVESTMENT PROCESS
      3. ADVANTAGES/DISADVANTAGES
      4. PERFORMANCE
      5. SUMMARY POINTS
      6. KEY TERMS
    6. CHAPTER 8 - Distressed Securities
      1. CORE STRATEGY
      2. INVESTMENT PROCESS
      3. RISK CONTROL
      4. ADVANTAGES/DISADVANTAGES
      5. PERFORMANCE
      6. SUMMARY POINTS
      7. KEY TERMS
    7. CHAPTER 9 - Event-Driven Strategies
      1. CORE STRATEGY
      2. INVESTMENT PROCESS
      3. ADVANTAGES/DISADVANTAGES
      4. PERFORMANCE
      5. SUMMARY POINTS
      6. KEY TERMS
    8. CHAPTER 10 - Macro Investing
      1. CORE STRATEGY
      2. INVESTMENT PROCESS
      3. ADVANTAGES/DISADVANTAGES
      4. PERFORMANCE
      5. SUMMARY POINTS
      6. KEY TERMS
    9. CHAPTER 11 - Sector Funds
      1. CORE STRATEGY
      2. INVESTMENT PROCESS
      3. RISK CONTROL
      4. ADVANTAGES/DISADVANTAGES
      5. PERFORMANCE
      6. SUMMARY POINTS
      7. KEY TERMS
    10. CHAPTER 12 - Equity Hedge
      1. CORE STRATEGY
      2. INVESTMENT PROCESS
      3. RISK CONTROL
      4. ADVANTAGES/DISADVANTAGES
      5. PERFORMANCE
      6. SUMMARY POINTS
      7. KEY TERMS
    11. CHAPTER 13 - Emerging Markets
      1. CORE STRATEGY
      2. INVESTMENT PROCESS
      3. RISK CONTROL
      4. ADVANTAGES / DISADVANTAGES
      5. PERFORMANCE
      6. SUMMARY POINTS
      7. KEY TERMS
    12. CHAPTER 14 - Short Selling
      1. CORE STRATEGY
      2. INVESTMENT PROCESS
      3. ADVANTAGES / DISADVANTAGES
      4. PERFORMANCE
      5. SUMMARY POINTS
      6. KEY TERMS
  9. PART III - Making an Investment
    1. CHAPTER 15 - Investing in Hedge Funds
      1. STEP ONE - PLANNING THE INVESTMENT
      2. STEP TWO - STRUCTURE AND STRATEGY SELECTION
      3. STEP THREE - MANAGER/FUND SEARCH AND SELECTION
      4. SUMMARY
    2. CHAPTER 16 - After the Initial Allocation
      1. ONGOING DUE DILIGENCE
      2. QUALITATIVE RISK CONTROL: HISTORIC PROBLEM AREAS
      3. TRANSPARENCY
      4. ILLUSTRATION OF RISK MONITORINGIN PRACTICE
      5. SUMMARY POINTS
  10. APPENDICES
  11. GLOSSARY
  12. NOTES
  13. INDEX
  14. ABOUT BLOOMBERG
  15. ABOUT THE AUTHOR