1 / 7

June 2009 Lisa Preudhomme Vice President, U.S. Business Development lisapcadoganmanagement 212-650-4655

2. Agenda. An Analysis of the CrisisWhat are Hedge Funds?How Have Hedge Funds Fared?Where do Hedge Funds Fit in a Portfolio?Why Use a Fund of Hedge Funds?. 3. An Analysis of the Crisis. More than two decades of increasing systemic leverage

kaelem
Download Presentation

June 2009 Lisa Preudhomme Vice President, U.S. Business Development lisapcadoganmanagement 212-650-4655

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


    1. June 2009 Lisa Preudhomme Vice President, U.S. Business Development lisap@cadoganmanagement.com 212-650-4655

    2. 2 Agenda An Analysis of the Crisis What are Hedge Funds? How Have Hedge Funds Fared? Where do Hedge Funds Fit in a Portfolio? Why Use a Fund of Hedge Funds?

    3. 3 An Analysis of the Crisis More than two decades of increasing systemic leverage – complicity among policy makers, the private sector and the consumer Increasingly lax underwriting standards: Decreasing quality of borrowers Artificially low volatility and defaults Increasingly complex structures and decreased accountability Greed Current need for price adjustments Ongoing shocks to the system: Uncertain future of the global financial system Decreasing asset values/inverse wealth effect Increasing unemployment Increased taxation Social instability?

    4. 4 What are Hedge Funds? A hedge fund constitutes an investment program whereby the managers or partners seek absolute returns by exploiting investment opportunities while protecting principal from potential financial loss. Source: Ineichen, Alexanger M. (2003a) “Absolute Returns – Risk and Opportunities of Hedge Fund Investing”, New York: John Wiley & Sons

    5. 5 How Have Hedge Funds Fared? As with any question, it depends on the context! As an equity substitute, they were acceptable; as a cash or short-term fixed income substitute, they were very disappointing; as an asset class billed as always being up, they were very disappointing The key is to use hedge funds in the most effective way possible

    6. 6 Where do Hedge Funds Fit in a Portfolio? Portfolios of hedge funds are best used to protect capital and provide diversification Are hedge funds a substitute for equities, fixed income or a completely independent category? How should one measure the success of a hedge fund? Return Risk Diversification/Beta How should one size an allocation to hedge funds?

    7. 7 Why Use a Fund of Hedge Funds? It isn’t as easy at it looks? Research Due Diligence Negotiation Portfolio Management Monitoring Appropriate Diversification

    8. 8

More Related