A hedge fund is not "investing" but engineering returns with risk control. The course examines where alpha comes from and why most funds fail to create it. Strategies: long/short equity, event-driven (merger arb, distressed, special situations), relative value (convertible arb, capital structure arb), global macro (rates, FX, commodities), systematic/CTA and quant equity. For each: return sources, typical risks, capacity and behaviour across market regimes. Portfolio construction: factor models (Fama-French, Barra), alpha/beta decomposition, exposure management, concentration, correlations, gross/net exposure, position sizing and Kelly. Risk management: VaR, CVaR, stress testing, scenario analysis, drawdown control, stop-loss policy, liquidity and gap risk. Financing: prime brokerage, margin, rehypothecation, short borrow and hard-to-borrow, financing costs and their impact on returns. Operational infrastructure: NAV, fee structure (2/20, hurdle, high-water mark), lockups, gates, side pockets, compliance and regulation (AIFMD, Form PF, investor reporting). A separate block covers building and defending a track record, fund marketing and working with allocators. Practice: building factor decomposition and a risk report on real data.
Thinking…