The Principles of Alternative Investments Management (eBook)

Ewelina Sokołowska graduated from the Faculty of Economics and Management in Torun with the title of the best graduate of the faculty. She was Ministry of National Education scholarship holder for outstanding achievement in science. She is currently working as assistant professor in the Corporate Finance Department, the Faculty of Management at the University of Gdansk. She has taught a number of subjects including: corporate finance, financial analysis, behavioral finance, derivatives in risk management and current trends on modern capital market. Her research interests are focused on broadly defined finances, especially the capital market and corporate finance. In addition, she is the author of over 60 scientific papers in the field of finance, including three monographs.

Preface 6
Contents 10
Chapter 1: Alternative Investments on Contemporary Financial Market 13
1.1 The Concept and the Essence of Alternative Investments 13
1.2 Classification of Alternative Investments 18
1.3 The Risk Associated with Alternative Investments 23
References 32
Chapter 2: Hedge Funds 33
2.1 Specificity of Hedge Funds 33
2.2 Functioning of Contemporary Hedge Funds 35
2.3 Classification of Hedge Funds 38
2.4 Legal Forms of Creating Hedge Funds 40
2.5 The Structure of Hedge Funds 42
2.6 Hedge Fund Databases 47
2.7 Database Errors 49
2.8 Hedge Fund Indices 51
2.9 Selected Hedge Fund Indices 52
2.10 Hedge Funds and Their Impact on the Financial Market 54
2.11 The Global Hedge Fund Market 55
2.12 The Forecasts of the Hedge Funds Market 59
References 64
Chapter 3: Investment Strategies of Hedge Funds 66
3.1 The Concept of Investment Strategies and Their Risk 66
3.2 Classification of Investment Strategies 68
3.3 The Relative Value Strategies 73
3.3.1 The Convertible Bond Arbitrage Strategy 75
3.3.2 The Fixed Income Arbitrage Strategy 76
3.3.3 The Equity Market Neutral Strategy 77
3.4 Event Driven or Specialist Credit Strategies 78
3.4.1 The Merger Arbitrage Strategy 79
3.4.2 The Distressed Securities Strategy 80
3.5 Opportunistic Strategies (Directional-Trading) 82
3.5.1 The Global Macro Strategy 83
3.5.2 The Strategy of Short-Selling 85
3.5.3 The Long/Short Equity Strategy 88
3.5.4 The Emerging Markets Strategy 89
References 90
Chapter 4: Funds of Funds 91
4.1 The Genesis of Funds of Funds 91
4.2 The Definition of Funds of Funds 92
4.3 The Types of Funds of Funds 92
4.4 The Constructions of Funds of Funds 94
4.5 Advantages of Investing in Funds of Funds 95
4.6 Disadvantages of Investing in Funds of Funds 97
4.7 The Global Funds of Funds Market 98
4.8 The Forecasts of Funds of Funds Market 100
References 102
Chapter 5: Managed Futures Investments 104
5.1 The Genesis of Managed Futures Investments 104
5.2 The Concept of Managed Futures Investments 106
5.3 Forms of Managed Futures Investments 108
5.4 Application of Managed Futures Transactions 113
5.5 Automated Transaction Systems in the Activity of Commodity Trading Advisors 116
5.6 The Forecasts of Managed Futures Investments 117
References 119
Chapter 6: Structured Products 121
6.1 The Concept of Structured Products 121
6.2 The Types of Structured Products 123
6.3 The Construction of Structured Products 126
6.4 Structured Certificates 127
6.4.1 Index Certificates 128
6.4.2 Bonus Certificates 129
6.4.3 Basket Certificates 129
6.5 Structured Maximum Return Rate Products 130
6.5.1 Discount Certificates 130
6.6 Structured Products with Capital Protection 131
6.6.1 Guaranteed Certificates 131
6.6.2 Structured Bonds 133
6.7 The Market of Structured Products in Europe 134
References 136
Chapter 7: Private Equity/Venture Capital Investments 137
7.1 Private Equity/Venture Capital: The Controversy Surrounding the Concepts and Their Possible Interpretations 137
7.2 Classification of Venture Capital/Private Equity Investments 141
7.3 Legal Forms of Venture Capital/Private Equity Funds 143
7.4 The Stages of Venture Capital/Private Equity Investments 144
7.5 Alternative Investments Markets in Europe 149
7.6 Alternative Investment Market in London 152
7.7 The European Venture Capital/Private Equity Market 153
7.8 The Forecasts of Venture Capital/Private Equity Market in Europe 156
References 158
Conclusion 159
Bibliography 161