Hedge Funds are a critical component of modern capital markets, but are often only vaguely understood by professionals and the public alike. Too often they are the whipping boys for failings or excesses in capital markets. Investor protection rules that limit publicity by partnerships have had the effect of characterizing hedge funds as secretive, opaque and threatening. In an era when hedge fund investments are present in either a primary or secondary role in most portfolios any investment professional or manager needs to know what they really are, what they do, and how and why.
Every day brings news about or affecting hedge funds. We will review and discuss, and students will have access to daily updates of hedge fund news.
The course will demonstrate the key roles hedge funds now play and how they have evolved in an age of disintermediation and technological advances. We will examine how they are likely to evolve in the future.
The course will explain typical hedge fund algorithms and strategies including quantitative non- discretionary trading, various arbitrage and hedging techniques, such as convertible and fixed income arbitrage and fundamentally driven value and distressed investing.
The course will also cover some of the pressing questions that hedge funds have to address, including Risk Management, Valuation, Transparency, Regulation, and Legal and Accounting practices. In addition to set lectures and interactive projects students will also meet key practitioners in portfolio trading, risk management, fund selection and legal matters.
John Maltby was a Columbia Business School faculty member from 2008 to 2015.