Hedge Fund Strategies
Hedge Fund Strategies
Hedge Fund Strategies
Set of flashcards Details
Flashcards | 7 |
---|---|
Language | Deutsch |
Category | Micro-Economics |
Level | Other |
Created / Updated | 12.07.2023 / 12.07.2023 |
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Hedge Fund Strategies
1. Event-driven strategies ( are typically based on a corporate restructuring or acquisition that creates profit opportunities for long or short positions in common equity, preferred equity, or debt of a specific corporation. Event-driven funds are typically long-biased)
2. Relative value strategies (involve buying a security and selling short a related security, with the goal of profiting when a perceived pricing discrepancy between the two is resolved)
3. Macro strategies are based on global economic trends and events and may involve long or short positions in equities, fixed income, currencies, or commodities. Managed futures funds may focus on trading commodity futures (these funds are known as commodity trading advisers, or CTAs) or incorporate financial futures.
4. Equity hedge fund strategies seek to profit from long or short positions in publicly traded equities and derivatives with equities as their underlying assets.
Backfill bias
Backfill bias refers to the effect on historical index returns of adding fund returns for prior years to index returns when a fund is added to an index
Fund of funds
A Hedge Fund that invests in other hedge funds
Methods for exiting investments in portfolio companies
Methods for exiting investments in portfolio companies include trade sale (sell to a competitor or another strategic buyer), IPO (sell some or all shares to investors), recapitalization (issue portfolio company debt), secondary sale (sell to another private equity firm or other investors), or write-off/liquidation.
Classification of infrastructure investments
Infrastructure investments may be classified as greenfield (assets to be built) or brownfield (existing assets)
Commodity valuation
futures price ≈ spot price × (1 + risk-free rate) + storage costs − convenience yield
Sector Funds/ Specialised Funds
Specialized funds focus on specific commodities such as oil and gas, grains, precious metals, or industrial metals. Sector funds restrict investments to a particular sector of the market, such as energy or health care.