|
Provided by: FitchTraining Hedge Funds A Credit PerspectiveAccounting and Finance |
 |
Training
Provided by FitchTraining
A two-day intensive workshop offering an in depth structured approach to the analysis of hedge funds and alternative investment strategies. The workshop takes a credit focus for bankers and analysts but is also appropriate for a wider audience who need to understand the key risk issues of the hedge fund industry.
Related Awards, Degrees or Certifications: Earn CPD credits
We are an accredited training provider with a number of institutions including:
ACCA
NASBA
Securi
|
|
||||||||||
Hedge Funds A Credit Perspective
Course Objectives
The two-day workshop offers a structured analytic framework for the credit analysis of hedge and other unregulated funds.
Specifically participants will be equipped to:
Distinguish the risk profile of a fund s investment strategy, structure, leverage and liquidity
Apply financial analytic tools used to benchmark the performance and risk profile of a fund
Identify the due diligence required for evaluating the fund manager's expertise, investment process, risk management and controls
Evaluate the structural risks and mitigants of exposures to funds.
Target Audience
The workshop is targeted at an intermediate level for credit analysts but is also appropriate for a wider audience of risk managers, bankers, regulators and other professionals who need to understand the key risk issues of the hedge fund industry. Participants should have a reasonable understanding of investment markets and financial products.
This workshop is complementary to the one day workshop: Regulated Funds and Fund Managers: A Credit Perspective. Participants may also be interested in attending Counterparty Credit Risk in Derivatives.
The majority of Fitch Training programmes are offered at an intermediate and advanced level. There are no specific prerequisite courses to attend our programmes, however some topic knowledge maybe required. Please refer to the target audience to see what level of prior knowledge is required for a specific course.
Content
INDUSTRY OVERVIEW
Background
History and growth of hedge funds
Role of hedge funds in financial markets
Investors - evolving investor base
Features of unregulated funds:
Hedge funds, managed accounts, certain closed ended funds, fund of funds, master feeders, private equity etc.
Legal status - partnerships, corporations, managed accounts etc.
Fee structures - management and performance; high water marks
Investor redemption terms-lockups, notice periods, frequency
Funds of funds and other structured products
Jurisdiction - offshore registrations, listings, fund manager domicile
Goals
Absolute versus benchmarked returns
Alpha versus beta; portable alpha
Correlations
ANALYTIC OVERVIEW
Structured approach to analysis
Purpose of transaction and sources of payback - Who is the counterparty? What assets or derivatives are being financed? How will the transaction be settled or the debt repaid at maturity?
Risk analysis - orientation of fund, strategy, financials and key parties
Structure - risks and mitigants of the transaction
FUND ANALYSIS
Key parties
Roles and responsibilities of various parties: manager, advisers, administrator, prime broker, custodian etc
Prime brokers - impact of relationship on risk profile
Strategies and investment practices
Techniques to achieve high risk adjusted returns: leverage, derivatives and short selling
Fund policies, practices and restrictions
Risk profile of different strategies
Directional Strategies
Global macro
Managed futures
Dedicated short bias
Emerging markets
Relative value strategies
Convertible arbitrage
Equity market neutral
Long/ short equity
Fixed income arbitrage
Event-driven
Distressed
Risk arbitrage
Multi strategy funds
Pitfalls of different strategies - examples of where they can go wrong
Financial analysis
S : Size - reviewing size, diversification and market position of fund
M : Market risk - volatility measures standard deviation, correlations, VaR, stress simulations, concentrations etc.
A : Asset quality - liquidity and valuations
L : Liquidity - redemption risk and financing arrangements
L : Leverage - gross and net leverage calculations, limitations of leverage calculations
P : Performance - bench marking performance against indices and evaluating past performance; measuring risk and performance Sharpe and Sortino ratios; peak to trough drawdown
Case study - Importance and limitations of performance measures
Early warning signals
Summary of major failures and causes
Common themes
Case study - Long Term Capital Management and Amaranth Advisors
FUND MANAGER
Due diligence
Key issues - experience levels; size, affiliation
Sustainability of business model
Regulation and supervision, where appropriate
Risk management
Investment process
Operational and credit risk
Market risk control - appropriate limit and control structures for different strategies
STRUCTURE
Structured approach
Using the purpose payback model to evaluate transactions
Types of risk when dealing with funds - credit, market, operational, reputation
Exposure profile - assessing the appropriateness of the structure in terms of amount, maturity etc.
Ranking - establishing and maintaining a senior position
Pricing - evaluating the risk return profile of the transaction
Focus on safeguards
Types - collateral, unsecured thresholds, covenants, break clauses, NAV triggers, NAV floor, cross default
Collateralisation of trading transactions - measuring and margining exposure
Portfolio margining
Legal documentation - ISDA, prime brokerage and repurchase agreements
CASE STUDY
Perform a complete analysis and risk rating of a new hedge fund counterparty
Recommend how proposed transactions should be structured.
The two-day workshop offers a structured analytic framework for the credit analysis of hedge and other unregulated funds.
Specifically participants will be equipped to:
Distinguish the risk profile of a fund s investment strategy, structure, leverage and liquidity
Apply financial analytic tools used to benchmark the performance and risk profile of a fund
Identify the due diligence required for evaluating the fund manager's expertise, investment process, risk management and controls
Evaluate the structural risks and mitigants of exposures to funds.
Target Audience
The workshop is targeted at an intermediate level for credit analysts but is also appropriate for a wider audience of risk managers, bankers, regulators and other professionals who need to understand the key risk issues of the hedge fund industry. Participants should have a reasonable understanding of investment markets and financial products.
This workshop is complementary to the one day workshop: Regulated Funds and Fund Managers: A Credit Perspective. Participants may also be interested in attending Counterparty Credit Risk in Derivatives.
The majority of Fitch Training programmes are offered at an intermediate and advanced level. There are no specific prerequisite courses to attend our programmes, however some topic knowledge maybe required. Please refer to the target audience to see what level of prior knowledge is required for a specific course.
Content
INDUSTRY OVERVIEW
Background
History and growth of hedge funds
Role of hedge funds in financial markets
Investors - evolving investor base
Features of unregulated funds:
Hedge funds, managed accounts, certain closed ended funds, fund of funds, master feeders, private equity etc.
Legal status - partnerships, corporations, managed accounts etc.
Fee structures - management and performance; high water marks
Investor redemption terms-lockups, notice periods, frequency
Funds of funds and other structured products
Jurisdiction - offshore registrations, listings, fund manager domicile
Goals
Absolute versus benchmarked returns
Alpha versus beta; portable alpha
Correlations
ANALYTIC OVERVIEW
Structured approach to analysis
Purpose of transaction and sources of payback - Who is the counterparty? What assets or derivatives are being financed? How will the transaction be settled or the debt repaid at maturity?
Risk analysis - orientation of fund, strategy, financials and key parties
Structure - risks and mitigants of the transaction
FUND ANALYSIS
Key parties
Roles and responsibilities of various parties: manager, advisers, administrator, prime broker, custodian etc
Prime brokers - impact of relationship on risk profile
Strategies and investment practices
Techniques to achieve high risk adjusted returns: leverage, derivatives and short selling
Fund policies, practices and restrictions
Risk profile of different strategies
Directional Strategies
Global macro
Managed futures
Dedicated short bias
Emerging markets
Relative value strategies
Convertible arbitrage
Equity market neutral
Long/ short equity
Fixed income arbitrage
Event-driven
Distressed
Risk arbitrage
Multi strategy funds
Pitfalls of different strategies - examples of where they can go wrong
Financial analysis
S : Size - reviewing size, diversification and market position of fund
M : Market risk - volatility measures standard deviation, correlations, VaR, stress simulations, concentrations etc.
A : Asset quality - liquidity and valuations
L : Liquidity - redemption risk and financing arrangements
L : Leverage - gross and net leverage calculations, limitations of leverage calculations
P : Performance - bench marking performance against indices and evaluating past performance; measuring risk and performance Sharpe and Sortino ratios; peak to trough drawdown
Case study - Importance and limitations of performance measures
Early warning signals
Summary of major failures and causes
Common themes
Case study - Long Term Capital Management and Amaranth Advisors
FUND MANAGER
Due diligence
Key issues - experience levels; size, affiliation
Sustainability of business model
Regulation and supervision, where appropriate
Risk management
Investment process
Operational and credit risk
Market risk control - appropriate limit and control structures for different strategies
STRUCTURE
Structured approach
Using the purpose payback model to evaluate transactions
Types of risk when dealing with funds - credit, market, operational, reputation
Exposure profile - assessing the appropriateness of the structure in terms of amount, maturity etc.
Ranking - establishing and maintaining a senior position
Pricing - evaluating the risk return profile of the transaction
Focus on safeguards
Types - collateral, unsecured thresholds, covenants, break clauses, NAV triggers, NAV floor, cross default
Collateralisation of trading transactions - measuring and margining exposure
Portfolio margining
Legal documentation - ISDA, prime brokerage and repurchase agreements
CASE STUDY
Perform a complete analysis and risk rating of a new hedge fund counterparty
Recommend how proposed transactions should be structured.
About The Training Provider: FitchTraining
FitchTraining - Fitch Training is a specialist training firm focused on the provision of credit and corporate finance training. Courses are offered in three areas: financial institutions, corporate credit and securitization. Fitch Training is part of Fitch Solutions, a division of the Fitch Group. We also work in partnership with Fitch Solutions to provide quantitative training.
Fitch Training operates...
