Hedge Funds

Full coverage of how hedge funds work, from risks to rewards
L'Habitant discusses--from an investor's perspective--the potential uses, risks, and returns in hedge funds, while offering both the qualitative and quantitative tools investors need to access these types of funds. Topics not normally covered in discussions of hedge funds are included, such as how to include hedge funds in traditional portfolios, database differences, and non-transparency. A practical guide to a growing, yet little understood, segment of the financial industry.
Francois-Serge L'Habitant, PhD (Geneva, Switzerland), is Head of Quantitative Risk Management at Union Bancaire Privee in Geneva, Switzerland. A former computer engineer, he previously served as Director of UBS Private Banking Division.
Over the years, financial professionals around the world have looked to the Wiley Finance series and its wide array of bestselling books for the knowledge, insights, and techniques that are essential to success in financial markets. As the pace of change in financial markets and instruments quickens, Wiley Finance continues to respond. With critically acclaimed books by leading thinkers on value investing, risk management, asset allocation, and many other critical subjects, the Wiley Finance series provides the financial community with information they want. Written to provide professionals and individuals with the most current thinking from the best minds in the industry, it is no wonder that the Wiley Finance series is the first and last stop for financial professionals looking to increase their financial expertise.Als Hedge Funds bezeichnet man Investmentfonds, die mit einer hochspekulativen Anlagepolitik und mit verschiedensten Strategien in allen Finanzinstrumenten investieren. Sie haben meist sowohl Kaufs- als auch Verkaufspositionen und können durch einen Leverage auch zusätzlich fremdfinanziert sein. Vorrangiges Ziel fast aller Hedge Funds ist es, möglichst schnell eine starke Vermehrung des Vermögens zu erreichen, bei gleichzeitiger Begrenzung des Verlustrisikos.
Hedge Funds gehören zwar zu dem am schnellsten wachsenden Bereich der Finanzbranche, aber häufig sind selbst Marktexperten mit diesem Thema nur am Rande vertraut. "Hedge Funds: Risks and Returns" schafft Abhilfe. Autor François-Serge L'Habitant, ein angesehener Finanzexperte, erläutert hier aus Sicht der Anleger ausführlich Funktionsweise, Risiken und Vorteile von Hedge Funds. Darüber hinaus vermittelt er die geeigneten qualitativen und quantitativen Tools zu Bewertung von Nutzen, Leistungsfähigkeit und Ertragspotential von Hedge Funds. Introduction

Part One Hedge Fund Overview

The Basics Revisited.

Legal Environment and Structures.

Operational and Organizational Structures.

Part Two Hedge Fund Strategies

Introduction to Strategies.

The Tools used by Hedge Funds.

Long/Short Strategies.

Arbitrage and Relative Value Strategies.

Event-Driven Strategies.

Directional Strategies.

Hedge Fund Indices.

Hedge Fund Performance: Beyond Net Asset Values.

Part Three Hedge Fund Investing

Introduction.

Asset Allocation

Hedge Fund Selection

Funds of Funds: The Quest for Meta-diversification.

Capital Guaranteed Products.

Advanced Topics: inside the black box

Conclusions.

Appendix: The Statistics of Hedge Funds.

Useful Sources of Information. “Balanced, Constructive and instructive, this is an essential read for investors, portfolio managers and financial advisers.” (Financial World, July 2004) "Das neue Buch ist eine Bereicherung, sowohl für den Anfänger als auch für den fortgeschrittenen Kenner der Hedge Fund-Szene, da es einige aktuelle Aspekte mit verarbeitet und von einem sehr profunden Kenner der Szene gut lesbar aufbereitet wurde."
Absolutreport, Nr. 8-9/2002, (www.absolut-report.de) Francois-Serge Lhabitant has substantial experience in risk management as both a practitioner and academic. He is Head of Quantitative Risk Management at Union Bancaire Privée, Geneva whilst he is also Professor of Risk Management at HEC, University of Lausanne. In addition to this he is Assistant Professor of Finance at Thunderbird, the American Graduate School of International Management and is one of the holders of the Deloitte & Touche Chair on Risk Management at the University of Antwerp. His previous experience includes being a Director of UBS/Global Asset Management Many myths have grown up around the hedge fund industry, aided by high profile cases such as LTCM. However, like any investment category, each manager differs in the leverage they use and the hedging policies they employ. Nonetheless, the primary aim of most hedge funds is to reduce volatility and risk while attempting to preserve capital and deliver positive returns under all market conditions.

In this book the author explains, from an investor's perspective, the workings of hedge funds, their uses, risks and potential returns. No prior knowledge of the field is required as the author explains the strategies in a clear, concise manner. He also uses many examples and case studies to illustrate his point. This book is an ideal reference source for both investment professionals and serious financial students.

Written intelligently and authoritatively, the book features the following:
* The characteristics of hedge funds against traditional investment funds

* The legal framework surrounding hedge funds in the US and other countries

* Various strategies followed by hedge funds

* The hedge fund indices that are available

* Asset allocation and the hedge fund selection process

* New investment vehicles

* Recent academic research on hedge funds. Hedge Funds are one of the fastest growing sectors of asset management. The industry has changed from being a small number of firms that features big name players such as George Soros and Julian Robertson, to a large market involving many thousands of companies.

Press reports of the spectacular success and failure of firms such as the Quantum Fund, the Tiger Fund and LTCM have led to many misconceptions concerning hedge funds, their power and their influence. This state of affairs is not helped by the fact that they are exempt from regulation and little is known about them.

This book dispels several misconceptions about hedge funds' operations and provides an impartial, up to date and comprehensive blend of theoretical and practical analysis of the market. The book also shows readers the fundamental concepts needed to understand strategies used by the funds and their potential positive and negative contributions to investment portfolios.