Absolute Returns: The Risk and Opportunities of Hedge Fund Investing / Edition 1

Absolute Returns: The Risk and Opportunities of Hedge Fund Investing / Edition 1

by Alexander M. Ineichen
     
 

ISBN-10: 0471251208

ISBN-13: 9780471251200

Pub. Date: 10/18/2002

Publisher: Wiley

The hedge fund business is about achieving excellent risk-adjusted returns, not about beating the market. In other words, the hedge fund business is about absolute returns. But not all hedge funds are created equal. A poorly chosen hedge fund or portfolio of hedge funds can produce disappointing results.

In Absolute Returns: The Risk and Opportunities of

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Overview

The hedge fund business is about achieving excellent risk-adjusted returns, not about beating the market. In other words, the hedge fund business is about absolute returns. But not all hedge funds are created equal. A poorly chosen hedge fund or portfolio of hedge funds can produce disappointing results.

In Absolute Returns: The Risk and Opportunities of Hedge Fund Investing, Alexander Ineichen-Head of Equity Derivatives Research for UBS Warburg in London and author of the widely read research publication In Search of Alpha: Investing in Hedge Funds-demystifies what hedge funds are, how they invest to generate superior risk-adjusted returns, and what the concurrent risks of investing in them are.

Divided into four comprehensive parts . . .

Part I: The Hedge Fund Industry

Part II: Risk and Opportunities of Absolute Return Strategies

Part III: The Fund of Hedge Funds Industry

Part IV: Going Forward

. . . this book will introduce you to the new investment paradigm of absolute returns, outline the risk and opportunities of absolute return strategies, dispel the myths and misconceptions that have surrounded hedge funds, and provide a detailed look at the advantages and disadvantages of hedge fund investing.

Besides focusing on the characteristics and performance of single hedge funds, Absolute Returns also discusses the fund of hedge funds approach, a strategy in which a single fund invests in a portfolio of hedge funds. Ineichen explores the fund of hedge funds industry, the vehicles within this industry, as well as the potential for alpha in a fund of hedge funds.

There are essentially two main reasons to invest in hedge funds: superior performance and diversification. Absolute Returns will help you understand each of these topics as well as a number of other hedge fund issues you must be familiar with in order to succeed in this arena. Filled with helpful charts, real-world examples, and an informative appendix for each chapter, Absolute Returns will allow you to make more educated decisions about hedge fund investments.

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Product Details

ISBN-13:
9780471251200
Publisher:
Wiley
Publication date:
10/18/2002
Series:
Wiley Finance Series, #135
Pages:
528
Product dimensions:
6.26(w) x 9.26(h) x 1.62(d)

Table of Contents

Acknowledgments ix

Preface xi

PART ONE The Hedge Fund Industry 1

CHAPTER 1 Introducing Absolute Returns 3

Appendix: Risk Illusion 56

CHAPTER 2 Myths and Misconceptions 59

Appendix: Press Coverage of Hedge Funds 93

CHAPTER 3 Difference between Long-Only and Absolute Return Funds 98

Appendix: Guatemalan Dentist 132

CHAPTER 4 Advantages and Disadvantages of Investing in Hedge Funds 134

Appendix: On Market Efficiency and Unorthodox Economics 159

PART TWO Risk and Opportunities of Absolute Return Strategies 177

CHAPTER 5 Classification and Performance of Hedge Funds 179

CHAPTER 6 Relative-Value and Market-Neutral Strategies 199

CHAPTER 7 Event-Driven Strategies 251

CHAPTER 8 Opportunistic Absolute Return Strategies 286

Appendix: Long/Short Controversy 361

PART THREE The Fund of Hedge Funds Industry 369

CHAPTER 9 Industry Overview 371

CHAPTER 10 Advantages and Disadvantages of Investing in Funds of Hedge Funds 401

CHAPTER 11 The Alpha in Funds of Hedge Funds 420

PART FOUR Going Forward 451

CHAPTER 12 Game of Risk or Risky Game? 453

Notes 479

References 484

Index 499

About the Author 514

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