Safari, the world’s most comprehensive technology and business learning platform.

Find the exact information you need to solve a problem on the fly, or go deeper to master the technologies and skills you need to succeed

Start Free Trial

No credit card required

O'Reilly logo
Managing Hedge Fund Risk and Financing: Adapting to a New Era

Book Description

What makes this book special is that it presents an insider's perspective of what went right, what went wrong, and what are the lessons learned from the crisis. David Belmont had a front row seat and role to play with hedge funds as a crisis scenario few had contemplated played out—a scenario with not only huge investment risks, but also counterparty, funding, and operational risks. Want to know what really happened to hedge funds during the financial crisis? The holistic view is presented here: how to manage a hedge fund with investment, funding, counterparty and operational risks in mind.

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Dedication
  5. Acknowledgments
  6. Introduction: Managing Complexity and Uncertainty
  7. Chapter 1: The Quick and the Dead: Lessons Learned
    1. The Global Credit Crisis: 2008–2010
    2. The Quick and the Dead
    3. Stakeholders’ Rights
    4. Conclusion
  8. Chapter 2: An Integrated Approach to Hedge Fund Risk Management
    1. Minimum Integrated Risk management Capabilities
    2. Minimum Risk management Capabilities by Risk Type
    3. The Importance of Integrated Risk Management: Lehman Brothers International (LBIE)
    4. Conclusion
  9. Chapter 3: A Survey of Hedge Fund Strategies and Risks
    1. Hedge fund Strategies
    2. Hedge fund Investment Risks
    3. Business risk Management Strategies
    4. Conclusion
  10. Chapter 4: Analysis of the Risk/Return Profile of Hedge Fund Strategies
    1. Opportunistic Strategies
    2. Event driven Strategies
    3. Relative value Strategies
    4. Capital structure Arbitrage Strategies
  11. Chapter 5: Managing Funding Risk
    1. Constitutional Documents
    2. Funding liquidity Risk management Strategies: Managing Investor Redemptions
    3. Funding liquidity Risk management Strategies: Prime Brokers
    4. Conclusion
  12. Chapter 6: Managing Counterparty Risk
    1. Hedge fund Exposures to Prime Brokers
    2. Counterparty Risk Mitigation Strategies
    3. Conclusion
  13. Chapter 7: Risk Management for Hedge Fund Investors
    1. Determining the Asset Allocation to Hedge Funds
    2. Investment Approach
    3. Selecting Strategies and Screening Funds
    4. Detecting Abnormal Return Patterns
    5. Hedge fund Monitoring
    6. Conclusion
  14. Chapter 8: Conclusion
    1. The Importance of Change
  15. Appendix 1: Topics for Due Diligence
  16. Appendix 2: Hedge Fund Failures
    1. Amaranth Advisors LLC (2006)
    2. LTCM (1998)
  17. Appendix 3: Cash Management and the Probability of Failure
    1. Return Profiles
    2. Structural default Model
    3. Funding-based Failure Model
  18. Index