Risk Free Rate of Return | Risk Free Interest Rates
Risk Free Rate of Return
Risk Free Interest Rate Definition
Riskless Arbitrage Investment Strategy | Definition | What is it?
Riskless Arbitrage
Riskless Arbitrage Investment Strategy
Purchasing stocks of companies that are likely takeover targets, while assuming short positions in the would-be acquiring companies. Risk arb players can employ an event-driven investment strategy or merger arbitrage investment strategy, seeking situations such as hostile takeovers, mergers and leveraged buyouts. Such funds typically experience moderate amounts of volatility.
Definition Source: HedgecoRelated to Riskless Arbitrage:
Tags: Riskless arbitrage, risk arbitrage, risk arbitrage strategy, risk free arbitrage, arbitrage pricing risk theory, merger arbitrage, merger and acquisition arbitrage, merger arbitrage strategyRelative Value Arbitrage Investing | Short Definition | What is it?
Relative Value Arbitrage
Relative Value Arbitrage Investing
A market-neutral investment strategy that seeks to identify investments whose values are attractive, compared to similar securities, when risk, liquidity and return are taken into account.
Definition Source: HedgecoRelated to Relative Value Arbitrage Investing:
Tags: Relative Value Arbitrage Investing, Relative Value Investing, Relative Value Arbitrage, Relative Value Investments, Fixed Income Relative Value, relative value hedge fundSEC Regulation D | SEC Regulation D Definition
SEC Regulation D
SEC Regulation D Explanation
A provision in the Securities Act of 1933 that allows privately placed transactions to take place without SEC registration and prohibits hedge funds from advertising themselves to the general public. It also outlines which parties qualify as company insiders.Related to SEC Regulation D:
Tags: SEC Regulation D, Regulation D, SEC Regulation, Regulation D by the SEC, What is Regulation D, Regulations D by the SEC, SEC Regulation D Definition, Define SEC Regulation DRegulation D Securities | What are Regulation D Securities?
Regulation D investment strategy
Regulation D investment Strategy
An approach in which the fund manager provides financing to publicly traded companies, usually in exchange for a privately placed convertible note issued at a discount. Also known as PIPES (private investments in public entities).Related to Regulation D Securities:
Tags: Regulation D, SEC Regulation D, Regulation D Securities, Bank Regulation D, Regulation Industry, Account Regulation D, What is regulation D, Define Regulation DRedemption Fee | What is a redemption fee?
Redemption Fee
Redemption Fee | Definition
A charge, intended to discourage withdrawals that a hedge-fund manager levies against investors when they cash in their shares in the fund before a specified dateRelated to Redemption Fee:
Tags: Redemption Fee, Redemption Fees, Mutual Fund Redemption Fee, What is a redemption fee, redemption fee rule, redemption fee law, redemption fee rulesAnnual Rate of Return | Rate of Investment Return Definition
Annual Rate of Return
Annual Rate of Investment Returns
The annual appreciation in the value of a fund or any other type of investment, stated as a percentage of the total amount invested. Sometimes referred to a simply the "return."Definition Source: HedgecoRelated to Annual Rate of Return:
Tags: Annual Rate of Return, Annual Rate of Investment Returns, Investment Returns, rate of investment returns, Investment rate of return, rate of return for hedge fundsR Squared Value | Calculation & Definition | What is it?
R Squared Value
R Squared Value Calculation
A measure of the degree to which a hedge fund's returns are correlated to the broader financial market. A figure of 1 would be a perfect correlation, while 0 would be no correlation and minus-1 would be a perfect inverse correlation. Any figure below 0.3 is considered non-correlated. The result is used to determine whether a hedge fund follows a market-neutral investment strategy. Sometimes referred to as "R." Definition Source: HedgecoRelated to R Squared Value:
Tags: R Squared Value, R Squared, R-Squared, What is r squared, calculate r squared, what does calculate mean, define r squared, r squared definition, r squared ratio calculationQualified Purchaser Act Definition | What is a Qualified Purchaser?
Qualified Purchaser
What is a Qualified Purchaser?
To be a qualified purchaser you must meet either of the following criteria:a) Individuals who own $5 million in investments, which include securities, financial contracts entered into for investment purposes, cash, cash equivalents held for investment purposes, real estate held for investment purposes, CDs, bankers acceptances and other similar bank instruments held for investment purposes. Investments do not include real estate held for personal purposes, jewelry, art, antiques, and other collectibles. Debt used to acquire the investments is excluded from the value of the investments;
b) Institutional investors who own $25 million in investments;
c) A family owned company that owns $5 million in investments;
d) For trusts with less than $25 million, a trust where the trustee and each person who contributes assets to the trust is a Qualified Purchaser; e) A "Qualified Institutional Buyer" under Rule 144A of the 33 Act, except that "dealers" under Rule 144 must meet the $25 million standard of the 1940 Act, rather than the $10 million standard of Rule 144A. Rule 144A generally defines a "Qualified Institutional Buyer" as institutions, including registered Investment Companies, that own and invest on a discretionary basis $100 million of securities that are affiliated with the institution, banks that own and invest on a discretionary basis $100 million in QIB securities and have an audited net worth of $25 million, and certain registered dealers;
f) A company owned beneficially only by Qualified Purchasers; however, a company will not be deemed to be a qualified purchaser if it was formed for the specific purposes of acquiring the securities offered by a 3(c)(7) fund.
For a complete definition of Qualified Purchaser, please see Title 15 U.S.C. Chapter 2D, Sub Chapter I, Section 80a-2(a)(51), which is publicly available at www.gpoaccess.gov/uscode/browse.html Definition Source: Hedgeco
Related to Qualified Purchaser Act Definition:
Tags: Qualified Purchaser, Qualified Purchaser Act, What is a qualified purchaser, qualified purchaser for investments such as hedge funds, hedge fund qualified purchaser, define qualified purchaserPrivate Placement Program | Programs for Private Placement Investments
Private Placement Program
Private Placement Programs | Definition
Issues those are exempt from public-registration provisions in section 4-2 of the Securities Act of 1933. Hedge fund shares are generally offered as private placements, which are typically offered to only a few investors, rather than the general public. They must meet the following criteria:
- The issuer must believe that the buyer is capable of evaluating the risks of the transaction.
- Buyers have access to the same information that would appear in the prospectus of a publicly offered issue.
- The issuer does not sell the securities to more than 35 parties in any 12-month period.
- The buyer does not intend to sell the securities immediately for a trading profit.
Related to Private Placement Program:
Tags: Private Placement Program, Private Placement Investments, private placement, Private Placement Programs, What is a private placement memorandum, equity private placement, private placement securities, private placement offeringPrivate Equity Investment Fund | What is a Private Equity Fund?
Private Equity Investment Fund
Private Equity Investment Fund Definition
Entities that buy illiquid stakes in privately held companies, sometimes by participating in leveraged buyouts. Like hedge funds, the vehicles are structured as private investment partnerships in which only qualified investors may participate. Such funds typically charge a management fee of 1.5% to 2.5%, as well as an incentive fee of 25% to 30%. Most private-equity funds employ lock-up periods of five to ten years, longer than those of hedge fundsDefinition Source: HedgecoRelated to Private Equity Investment Fund:
Tags: Private Equity Investment Fund, Private Equity Fund, Private Equity Funds, Private Equity Investment Funds, Private Equity, Private Equity Firms, Private Equity FirmFund Prime Broker | Hedge Fund Prime Broker Functions
Fund Prime Broker
Hedge Fund Prime Broker
A large bank or securities firm that provides various administrative, back-office and financing services to hedge funds and other professional investors. Prime brokers can provide a wide variety of services, including trade reconciliation (clearing and settlement), custody services, risk management, margin financing, securities lending for the purpose of carrying out short sales, record keeping, and investor reporting. A prime brokerage relationship doesn't preclude hedge funds from carrying out trades with other brokers, or even employing others as prime brokers. To compete for business, some prime brokers act as incubators for funds, providing office space and services to help new fund managers get off the ground. Definition Source: HedgecoRelated to Fund Prime Broker:
Tags: Fund Prime Broker, Fund Prime Brokers, Hedge Fund Prime Broker, Hedge Fund Prime Brokers, Prime Brokers for Funds, Hedge Funds Prime Brokers New York CityPrivate Investment in Public Equities | Also Known as PIPEs
Private Investment in Public Equities
Private Investment in Public Equities
Acronym for private investments in public entities. Investments typically made by funds following Regulation D investment strategy.Definition Source: Hedgeco
Related to Private Investment in Public Equities:
Tags: Private Investment in Public Equities, Private Investment in Public Equity, PIPE, PIPEs, Private Investments in Public Equities, Private Investment in Public Equity InvestmentsOffshore Fund | Offshore Hedge Funds Definition | What are they?
Offshore Fund
Offshore Hedge Funds Definition
An investment vehicle that is domiciled outside the U.S. and has no limit on the number of non-U.S. investors it can take on. Although the fund's securities transactions occur on U.S. exchanges and are executed by a U.S. manager, or general partner, its administration and audits are conducted offshore -- usually in a tax haven like the Cayman Islands. Because it is administered outside the U.S., non-U.S. investors and such U.S. investors as pension funds and other tax-exempt entities aren't subject to U.S. taxes. Definition Source: HedgecoRelated to Offshore Fund:
Tags: Offshore Fund, Offshore Funds, Offshore Hedge Fund, Offshore Hedge Funds, Offshore Mutual Funds, Offshore investment fund, offshore fund management, offshore fund performanceNet Asset Value NAV | Calculation Ratio Definition | What is it?
Net Asset Value (NAV)
Net Asset Value (NAV) Calculation
A mutual fund's price per share or exchange-traded fund's per-share value. In both cases, the per-share dollar amount of the fund is derived by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of fund shares outstanding. In terms of corporate valuations, the value of assets less liabilities equals net asset value, or "book value".Definition Source: HedgecoRelated to Net Asset Value (NAV) Calculation:
Tags: Net Asset Value, NAV, Net Asset Value NAV, Net Asset Value Calculation, Define Net Asset Value, Net Asset Value Calculation, Net Asset Value of in for, hedge fund net asset value, funds net asset valueMerger Arbitrage Fund | Merger Arbitrage Investment Strategy Definition
Merger Arbitrage Fund
Merger Arbitrage Hedge Fund
Trading the stocks of companies that have announced acquisitions or are the targets of acquisitions. Seeks to exploit deviations of market prices from proposed exchange formulas.Definition Source: HedgecoRelated to Merger Arbitrage Hedge Fund:
Tags: Merger Arbitrage, Merger Arbitrage Fund, Merger Arbitrage Hedge Fund, Merger Arbitrage Funds, Merger Arbitrage Investment Strategy, Merger Arbitrage InvestmentsMaster Feeder Fund | What is a Master Feeder Hedge Fund Setup?
Master Feeder Fund
Master Feeder Hedge Fund Definition
A common hedge-fund structure through which a manager sets up two separate vehicles -- one based in the U.S. and an offshore fund that is domiciled outside the U.S. -- which serve as the only investors for a third non-U.S. fund. The two smaller entities are known as feeder funds, while the large offshore vehicle acts as the master fund. The purpose of such an arrangement is to create a single investment vehicle for both U.S. and non-U.S. investors.Definition Source: Hedgeco
Related to Master Feeder Fund | Hedge Fund Structure:
Tags: Master Feeder Fund, Master Feeder Hedge Fund, Master Feeder Funds, Master Feeder Hedge Funds, What is a master feeder fund, what are master feeder funds, master feeder fund setupEquity Market Neutral Fund | Market Neutral Hede Fund Strategy Definition
Market Neutral Fund
Equity Market Neutral Hedge Funds
An approach that aims to preserve capital through any of several methods and under any market conditions. The most common followers of the market-neutral strategy are funds pursuing a long/short investment strategy. These seek to exploit market discrepancies by purchasing undervalued securities and taking an equal, short position in a different and overvalued security. Market-neutral funds typically employ long-term holding periods and experience moderate volatility.Definition Source: Hedgeco
Related to Equity Market Neutral Hedge Fund Strategy:
Tags: Equity Market Neutral, Market Neutral Fund, Market Neutral Investment Strategy, Market Neutral Investing, Market Neutral Investments, Market Neutral Trading, Market Neutral Mutual Funds, Calamos Market NeutralStock Market Timer | Definition | What are stock market timers?
Stock Market Timer
Stock Market Timer Definition
A hedge-fund manager that selects asset allocations in anticipation of movements in the broad market. Definition Source: HedgecoRelated to Stock Market Timer:
Tags: Stock Market Timer, Stock Market Timers, Best Market Timers, Market Timer, Market Timers, Market, Timers, Bob Brinker Market Timer, Leading market timerAsset Management Fee | Management Fees Charged by Hedge Funds
Asset Management Fee
Asset Management Fees | Definition
The charge that a fund manager assesses to cover operating expenses. Investors are typically charged separately for costs incurred for outsourced services. The fee generally ranges from an annual 0.5% to 2% of an investor's entire holdings in the fund, and it is usually collected on a quarterly basis.Definition Source: HedgecoRelated to Asset Management Fee:
Tags: Asset Management Fee, Asset Management Fees, Money Management Fee, Hedge Fund Management Fee, Management Fee, Management Fees, Hedge Funds Management FeesManaged Futures Funds | What is a Managed Futures Fund?
Managed Futures Funds
What is a Managed Futures Fund?
A vehicle in which an investor gives a commodity trading advisor -- usually a manager or broker -- discretion or authority to buy and sell futures contracts, either unconditionally or with restrictions. A type of discretionary accountDefinition Source: Hedgeco
Related to Managed Futures Funds:
Tags: Managed Futures Funds, Managed Futures Fund, Managed Futures Accounts, Managed Futures Index, Managed Future Indices, Managed Futures Broker, Trading association hedge fundLong Short Strategy | Long Short Investment Strategy Used by Hedge Funds
Long Short Strategy
Long Short Investment Strategy
An approach in which fund managers buy stocks whose prices they expect will increase and takes short positions in securities (usually in the same sector) whose prices they believes will decline. The strategy, also known as the Jones Model, is designed to generate profits during bullish periods in the overall stock market, while serving as a source of capital protection in a falling stock market.Definition Source: Hedgeco
Related to Long Short Strategy:
Tags: Long Short Strategy, Long Short Investments, Long Short Hedge Fund Strategy, Long Short Investment, Long Short Strategies, Equity Long Short Hedge Fund StrategyLock Up Period | What is a hedge fund lock up peiod?
Lock Up Period
Hedge Fund Lock Up Period
The period of time -- often one year -- during which hedge-fund investors are initially prohibited from redeeming their sharesDefinition Source: Hedgeco
Related to Lock Up Period:
Tags: Lock Up Period, Hedge fund Lock Up, Hedge Funds Lock Up Period, IPO Lock Up Period, Hedge Fund Lock Up Periods, What is a lock up period, what are lock up periodsLimited Investment Partnership | What are Limited Investment Partnerships?
Limited Partnership
Limited Investment Partnerships
Many hedge funds are structured as limited partnerships, which are business organizations managed by one or more general partners who are liable for the fund's debts and obligations. The investors in such a structure are limited partners who do not participate in day-to-day operations and are liable only to the extent of their investments.Related to Limited Investment Partnerships:
Tags: Limited Investment Partnerships, Limited Partnerships, LP, LP Investment, Limited Investment Partnership, What is a limited investment partnership, what are limited investment partnershipsLeverage | Leverage Ratio | Fund Leverage Calculations
Leverage
Fund Leverage Ratio Definition
The borrowed money that an investor employs to increase buying power and increase its exposure to an investment. Users of leverage seek to increase their overall invested amounts in hopes that the returns on their positions will exceed their borrowing costs. The extent of a fund's leverage is stated either as a debt-to-equity ratio or as a percentage of the fund's total assets that are funded by debt. Example: If a fund has $1 million of equity capital and it borrows another $2 million to bring its total assets to $3 million, its leverage can be stated as "two times equity" or as 67% ($2 million divided by $3 million). Ratios of between two and five to one are common. Leverage can also come in the form of short sales, which involve borrowed securities. Definition Source: HedgecoRelated to Leverage Ratio for Hedge Funds:
Tags: Leverage, Financial Leverage, Leverage Ratio, Fund Leverage, Hedge Fund Leverage, Leverage Levels, How much Leverage, Bank Leverage, Hedge Funds Leverage, What is Leverage
Subscribe to:
Posts (Atom)