The Economics and Finance of Hedge Funds updates an earlier review by the authors. It includes reviews of recent studies on topics that were covered in the earlier survey, and summarizes research on new topics that were not part of the previous survey. These new topics cover a broad gamut of issues, ranging from hedge funds' use of leverage and exposure to different risks to their impact on various asset markets. The Economics and Finance of Hedge Funds consists of five broad sections. The first section reviews the literature examining both the time-series and cross-sectional variation in hedge fund performance. Time-series performance studies cover return generating processes, dynamic risk exposures, and determination of managerial skill. The second section covers studies focused on the cross-sectional relations between hedge funds' characteristics (including contractual features and time-varying features such as size and age) and fund performance. The third section analyzes the literature on the sources and nature of risks faced by hedge fund investors. In particular, the authors discuss risks that can arise from managerial incentives and sources of capital. The fourth section summarizes research on the role of hedge funds in the financial system. Specific topics here include hedge funds' impact on systemic risk, asset prices, and liquidity provision in financial markets. The fifth and final section focuses on potential biases and limitations of hedge fund data sources.
What makes this book special is that it presents an insider’s perspective of what went right, what went wrong, and what are the lessons learned from the crisis. David Belmont had a front row seat and role to play with hedge funds as a crisis scenario few had contemplated played out—a scenario with not only huge investment risks, but also counterparty, funding, and operational risks. Want to know what really happened to hedge funds during the financial crisis? The holistic view is presented here: how to manage a hedge fund with investment, funding, counterparty and operational risks in mind.
Sung Cheng Chih
Timothy M. Curran, CFA
Capital adequacy allocation is not yet a legal requirement for hedge funds, but given the increase in global investigations, the high failure rate and lack of consistent benchmarking standards, the idea of financial reserves and enforced operational risk management are appealing prospects for the hedge fund investment community. Most hedge funds have superficial risk management but very few apply a thorough operational risk methodology. Independent consulting risk manager, Armelle Guizot, presents in-depth classifications of the range of operational and systemic risks and provides the reader with a benchmark to allocate capital reserves to support them. Based on Guizot's operational and market risk experience gained through working with high profile clients such as JP Morgan, Sumitomo Mitsui and Merrill Lynch, the reader will find that this report: covers all the major operational and regulatory risks associated with hedge funds; provides infrastructural risk maps; introduces a simple methodology to calculate capital adequacy; incorporates industry risk management surveys to benchmark against peers; and encourages fund managers to think ahead. This report provides hedge fund managers with a complete set of risk principles and standards to avoid operational risks and potential financial losses. At the same time it proves a valuable resource for those without advanced quantitative knowledge, allowing them to quickly grasp the hidden risks of hedge funds.
An expert at fierce scowls and unpleasant grimaces, twelve-year-old Kaitlin Anderson presents a tough face to the world, usually hiding her quirky, imaginative nature. Still dealing with the loss of her mother to cancer, Kaitlin is less than kindly disposed to her stepmother Jane and her bratty half-sister, Anna. Meanwhile, Kaitlin has firmly fastened the bulk of her antagonism on her next-door neighbour - the odious boy, Michael, who used to be her best pal. Now, with the help of her friends, she devotes much of her energy to scheming to make him as miserable as possible. But is that what she really wants? Kaitlin's friends are a mixed bunch. There's her very favorite buddy in the world, Tracy - who seems to be losing her grip on reality. In contrast, there's the unflappable Winter, Kaitlin's prime competitor in all things academic. And don't forget the class heart-throb Glenn, who has suddenly developed a particular interest in Kaitlin. Does he want to be more than friends? And can she trust him? When her dad finally delivers a letter written by her mom just before her death, Kaitlin has to deal with her own grief and anger. But unexpectedly, she's able to use that letter and her own experiences to give some help and comfort to someone else who really needs it. And ultimately, she's forced to make some tough decisions about revenge and forgiveness. In the face of love and loyalty, Kaitlin has to decide what's most important in life.
The Charter of Fundamental Rights of the European Union enshrines the key political, social, and economic rights of EU citizens and residents under EU law. In its present form, it was approved in 2000 by the European Parliament, the Council of Ministers, and the European Commission. However, its legal status remained uncertain until the entry into force of the Treaty of Lisbon in December 2009. The Charter obliges the EU to act and legislate consistently with the Charter, and enables the EU's courts to strike down EU legislation which contravenes it. The Charter applies to EU Member States when they are implementing EU law, but does not extend the competences of the EU beyond the competences given to it in the treaties. Written by experts from several EU Member States, this commentary on the Charter - the first in English - provides an authoritative but succinct statement of how the Charter impacts EU law, domestic law, and international law. Following the conventional article-by-article approach, each commentator offers an expert view of how each article is either already being interpreted in the courts, or is likely to be interpreted. Each commentary is referenced to the case law and is augmented with extensive references to further reading. Six cross-cutting introductory chapters explain the Charter's institutional anchorage, its relationship to the Fundamental Rights Agency, its interaction with other parts of international human rights law, the enforcement mechanisms, extraterritorial scope, and the all-important 'Explanations.'