Book description
A detailed look at how to fix the hedge fund industry
The Future of Hedge Fund Investing spells out in refreshingly stark terms exactly how the industry let down its clients, and the changes needed to restore their confidence. Written by Monty Agarwal, the founder of Predator Capital Management, this insider's guide gives a full assessment of the business, including the advantages of hedge funds, their pitfalls, and, most importantly, how to avoid these missteps.
The book begins by describing the hedge fund universe, which includes funds and fund of funds; fund regulators, major investors, and middlemen; and fee structures, incentives, and typical investment strategies. From here, Agarwal explores possible solutions and fixes as he touches upon several important issues within this field.
Examines hedge funds' role in the 2008 market crisis and what can be learned from it
Discusses the structural changes for fund of funds in areas including trading, diversification, risk management, and due diligence
Provides guidance for investors to follow when interviewing hedge fund managers
Table of contents
- Title Page
- Copyright Page
- Dedication
- Foreword
- Introduction
-
CHAPTER 1 - Recent Hedge Fund Scandals
- PALM BEACH, FLORIDA
- KL FINANCIAL, MARCH 2005
- AMARANTH ADVISORS, SEPTEMBER 2006
- BERNIE MADOFF, DECEMBER 2008
- LESSON 1: RELATIONSHIPS DO NOT TRUMP DUE DILIGENCE
- LESSON 2: WHEN INVESTING IN HEDGE FUNDS, HIRE EXPERTS
- LESSON 3: “WE DID NOT KNOW WHAT WE WERE INVESTING IN” IS NOT AN EXCUSE
- CONCLUSION: SO CALLED EXPERTS, FUND OF FUNDS, HAVE FAILED
- CHAPTER 2 - The Players
- CHAPTER 3 - Hedge Funds
- CHAPTER 4 - Hedge Fund Strategies
- CHAPTER 5 - Hedge Fund Service Providers and Regulators
- CHAPTER 6 - Funds of Hedge Funds
-
CHAPTER 7 - An Expert Failure
- USELESSNESS OF HISTORICAL DATA CRUNCHING
- QUEST FOR STEADY RETURNS: SYSTEMATIC DESTRUCTION OF ALPHA
- BUCKETING BY ASSET CLASS AND GEOGRAPHY: A FLAWED CONCEPT
- ALPHA VERSUS BETA: THE TRADER GENERATES ALPHA, NOT THE STRATEGY
- 10 PERCENT TO 20 PERCENT ALLOCATION RULE
- MANAGING A HEDGE FUND MANAGER
- BOOKRUNNER VERSUS A PROPRIETARY TRADER
- SO-CALLED HEDGE FUND EXPERTS
- HEDGE FUNDS: HOUSE OF SECOND OR THIRD CHANCES?
- WHY DOES A LOSING HEDGE FUND MANAGER SHUT DOWN HIS FUND?
- WHY DOES THE INDUSTRY KEEP FUNDING A FAILED TRADER?
- CONCLUSION
-
CHAPTER 8 - Remodeling the Funds of Hedge Funds
- FIVE INVIOLABLE COMMANDMENTS
- TRADERS MANAGING TRADING INVESTMENTS
- DIFFERENTIATE BETWEEN ALPHA AND BETA STRATEGIES
- BUCKETING BASED ON TRADER METHODOLOGY
- APPROPRIATE RISK TEMPLATE BY STRATEGY
- MANAGER STOP LOSS AND LINKED REDEMPTIONS
- NOT 10 PERCENT, MAJORITY EVERY TIME
- ONGOING DUE DILIGENCE: IT IS NOT JUST ABOUT RETURNS
- CHAPTER 9 - Correct Risk Due Diligence
- CHAPTER 10 - Interviewing a Hedge Fund Manager
- CHAPTER 11 - Hedge Fund Industry’s Role in 2008 Market Crisis
- CHAPTER 12 - The End
- Bibliography
- Index
Product information
- Title: The Future of Hedge Fund Investing: A Regulatory and Structural Solution for a Fallen Industry
- Author(s):
- Release date: October 2009
- Publisher(s): Wiley
- ISBN: 9780470537442
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