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
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.