Alternative Investors to think about – Hedge Funds & Sovereign Wealth Funds
Introduction to the Hedge Fund industry
• What are they exactly? Generic characteristics to look for
• Industry origins. Why are some Funds ‘hedged’ & some not?
• How large is the overall Hedge Fund Universe? The numbers in context
• Asset Class performance or Manager value-added? The search for Alpha
Case Study - How do Investors choose their Hedge Fund Managers?
Hedge Fund Tactics, Counter-Parties & Relationships with IR Departments
• Counter-parties - Fund Administrators and Prime Brokerage
• Leverage & investing on margin.
• Short Selling explained. Stock lending – by who? Your own shareholders
• Waiter! There’s a Hedge Fund on my Share Register, what do I do?
• Contracts for Difference – obtaining exposure to movement in the Share price without having a position in the underlying, Long or Short
• What do Hedge Funds want from Investor Relations Departments?
Case Study – What do Corporates worry about?
Issues for Hedge Fund Investors
• Who is investing in them? Private Clients & Institutions
• Rationale for Hedge Funds in an Investors’ Portfolio
• The non-correlated Asset Class
• Attrition rates & Survivorship Bias, Drawdown
• Institutionalisation of Hedge Funds, Index Providers – Benchmark problems
Case Study – Why do Pension Funds invest in Hedge Funds anyway?
Sovereign Wealth Funds
• What are they exactly & what do they do?
• Where are they & how much money do they manage?
• Transparency & Investment Strategies. Risks of financial protectionism
• Implications for Global Financial stability in the markets
• Relationships with Corporates & their shareholders
Case Study – The SWF Transparency Index