The "distressed" category encompasses two broad sub-strategies including: In addition to these private equity strategies, hedge funds employ a variety of distressed investment strategies including the active trading of loans and bonds issued by distressed companies. Secondary investments refer to investments made in existing private equity assets. These transactions can involve the sale of private equity fund interests or portfolios of direct investments in privately held companies through the purchase of these investments from existing institutional investors. By its nature, the private equity asset class is illiquid, intended to be a long-term investment for buy and hold investors.
private-equityequityPrivate equity investor
Hedge fund. List of countries by gross fixed investment as percentage of GDP. List of economics topics. Market sentiment. Mortgage investment corporation. Rate of return. Socially responsible investing. Specialized investment fund. Technical analysis. Time value of money. Mutual Fund.
Commonly, commercial banks, investment banks, government agencies and other institutional investors such as mutual funds are significant collateral takers as well as providers. In addition, private parties may utilize stocks or other securities as collateral for portfolio loans in securities lending scenarios.
Bonds are bought and traded mostly by institutions like central banks, sovereign wealth funds, pension funds, insurance companies, hedge funds, and banks. Insurance companies and pension funds have liabilities which essentially include fixed amounts payable on predetermined dates. They buy the bonds to match their liabilities, and may be compelled by law to do this. Most individuals who want to own bonds do so through bond funds. Still, in the U.S., nearly 10% of all bonds outstanding are held directly by households. The volatility of bonds (especially short and medium dated bonds) is lower than that of equities (stocks).
ETFs are similar in many ways to traditional mutual funds, except that shares in an ETF can be bought and sold throughout the day like stocks on a stock exchange through a broker-dealer. Unlike traditional mutual funds, ETFs do not sell or redeem their individual shares at net asset value (NAV). Instead, financial institutions purchase and redeem ETF shares directly from the ETF, but only in large blocks (such as 50,000 shares), called creation units.
REITREITsreal estate investment trusts
The key statistics to examine the financial position and operation of a REIT are net asset value (NAV), funds from operations (FFO), and adjusted funds from operations (AFFO). REITs were created in the United States after President Dwight D. Eisenhower signed Public Law 86-779, sometimes called the Cigar Excise Tax Extension of 1960. The law was enacted to give all investors the opportunity to invest in large-scale, diversified portfolios of income-producing real estate in the same way they typically invest in other asset classes – through the purchase and sale of liquid securities. The first REIT was American Realty Trust founded by Thomas J. Broyhill, cousin of Virginia U.S.
The registrars are usually engaged by the fund manager and generally acts as a middleman between the fund manager and various other stakeholders. Collective investment scheme. Open-ended investment company. Investment trust. The FCA regulates unit trusts in the UK under their CIS (Collective Investment Scheme) rules. The Unit Trust Website on the Net.
Since the mid-1970s, it has also been argued that geographic diversification would generate superior risk-adjusted returns for large institutional investors by reducing overall portfolio risk while capturing some of the higher rates of return offered by the emerging markets of Asia and Latin America. If the prior expectations of the returns on all assets in the portfolio are identical, the expected return on a diversified portfolio will be identical to that on an undiversified portfolio. Some assets will do better than others; but since one does not know in advance which assets will perform better, this fact cannot be exploited in advance.
AQR Capital ManagementJohn M. LiewJohn Liew
Liew and Krail joined him, and the new team applied what they learned in academia to manage both hedge-fund and long-only assets. In 1998, Asness, David Kabiller, Krail and Liew left Goldman Sachs to establish AQR. AQR was among the first hedge fund managers to voluntarily register at its inception with the Securities and Exchange Commission. The firm’s first product was a hedge fund, though it soon (2000) entered into traditional portfolio management. In 2001, AQR had nearly $750 million assets under management. In 2004, AQR had $12 billion assets under management. The firm opened its first international office in Australia in 2005.
closed-endclosed-endedClosed End Funds
A fund raises its initial equity through the sale of common stock. The amount of equity that belongs to a share of common stock is known as its net asset value (NAV). As the fund operates, NAV increases with investment gains and decreases with losses. These gains or losses are amplified when the fund employs leverage. The amount of leverage a fund uses is expressed as a percent of total fund assets (e.g. if it has a 25% leverage ratio, that means that for each $100 of total assets under management, $75 is equity and $25 is debt). Leverage affects both fund income, and capital gains and losses.
financial crisis of 2007–2008global financial crisis2008 financial crisis
The first notable event signaling a possible financial crisis occurred in the United Kingdom on August 9, 2007, when BNP Paribas, citing "a complete evaporation of liquidity", blocked withdrawals from three hedge funds. The significance of this event was not immediately recognized but soon led to a panic as investors and savers attempted to liquidate assets deposited in highly leveraged financial institutions. The International Monetary Fund estimated that large US and European banks lost more than $1 trillion on toxic assets and from bad loans from January 2007 to September 2009. These losses are expected to top $2.8 trillion from 2007 to 2010.
portfolio managementasset managementinvestment manager
Investors may be institutions (insurance companies, pension funds, corporations, charities, educational establishments etc.) or private investors (both directly via investment contracts and more commonly via collective investment schemes e.g. mutual funds or exchange-traded funds). The term 'asset management' is often used to refer to the investment management of investment funds, while the more generic term 'fund management' may refer to all forms of institutional investment as well as investment management for private investors.
List of finance topicsList of valuation topicsFinance
Index fund. Activist shareholder. Mutual fund. Open-end fund. Closed-end fund. List of mutual-fund families. Financial engineering. Long-Term Capital Management. Hedge fund. Hedge. 529 plan (college savings). Asset allocation. Asset location. Budget. Coverdell Education Savings Account (Coverdell ESAs, formerly known as Education IRAs). Credit and debt. Credit card. Debt consolidation. Mortgage loan. Continuous-repayment mortgage. Debit card. Direct deposit. Employment contract. Commission. Employee stock option. Employee or fringe benefit. Health insurance. Paycheck. Salary. Wage. Financial literacy. Insurance. Predatory lending. Retirement plan. 401(a). 401(k). 403(b). 457 plan.
Highland Capital Management is an alternative investment management firm that manages hedge funds, structured investment vehicles and mutual funds. The firm invests in global public equities, as well as fixed income markets with a focus on leveraged loans, high yield bonds, and structured products. The firm is headquartered in Dallas, Texas. It also operates offices in New York City, Sao Paulo, Buenos Aires, Seoul and Singapore. Highland reported approximately $13.9 billion of assets under management in 2018. Highland Capital Management was founded in 1993 by James Dondero and Mark Okada.
Index investingindex fundsindex
Style drift occurs when actively managed mutual funds go outside of their described style (i.e., mid-cap value, large cap income, etc.) to increase returns. Such drift hurts portfolios that are built with diversification as a high priority. Drifting into other styles could reduce the overall portfolio's diversity and subsequently increase risk. With an index fund, this drift is not possible and accurate diversification of a portfolio is increased. Index funds must periodically "rebalance" or adjust their portfolios to match the new prices and market capitalization of the underlying securities in the stock or other indexes that they track.
UITsunit trustsunit-investment trusts
Some exchange-traded funds (ETFs) are technically classified as UITs: however, ETFs usually do not have set portfolios (they are either managed or update automatically to follow an index), and they can have lifetimes of over 100 years. For example, the SPDR S&P 500 Trust is scheduled to terminate January 21, 2118, and the PowerShares QQQ Trust is scheduled to terminate March 4, 2124. Collective investment scheme. Mutual fund. Stockbroker. Brokerage firm.
Traditional and alternative investments. Voting interest.
Hedge funds are typically open-ended and actively managed. However, investors can typically redeem shares only monthly or less frequently (e.g., quarterly or semi-annually). U.S. mutual funds: fr:OPCVM pt:Fundo de investimento T. Rowe Price. Fidelity Investments' Magellan. The Vanguard Group's S&P 500. PIMCO Total Return. WorldCommodity Fund. Collective investment schemes. Mutual funds. Unit trusts. Open-ended investment company. SICAVs. Closed-end fund.
fund administratorFund Administratorshedge fund administration
Fund administration is the name given to the set of activities that are carried out in support of the process of running a collective investment scheme, whether the scheme is a traditional mutual fund, a hedge fund, pension fund, unit trust, or something in between. Managers of funds often choose to outsource some or all of these activities to external specialist companies, such as a fund's custodian bank. These companies are often known as fund administrators. These administrative activities may include the following administrative functions, which may include "fund accounting" functions.
investment bankinvestment bankerinvestment banks
They are a key part of capital market transactions, involving debt structuring, exit financing, loan amendment, project finance, leveraged buy-outs, and sometimes portfolio hedging. Front office market risk activities provide service to investors via derivative solutions, portfolio management, portfolio consulting, and risk advisory. Well-known risk groups in JPMorgan Chase, Morgan Stanley, Goldman Sachs and Barclays engage in revenue-generating activities involving debt structuring, restructuring, syndicated loans, and securitization for clients such as corporates, governments, and hedge funds. J.P.
offshoreoffshore financial centresoffshore financial centers
Many offshore jurisdictions specialise in the formation of collective investment schemes, or mutual funds. The market leader is the Cayman Islands, estimated to house about 75% of world's hedge funds and nearly half the industry's estimated $1.1 trillion of assets under management (although statistics in the hedge fund industry are notoriously speculative), followed by Bermuda, although a market shift has meant that a number of hedge funds are now formed in the British Virgin Islands. But the greater appeal of offshore jurisdictions to form mutual funds is usually in the regulatory considerations.
venture capitalistventure capital firmventure capitalists
Throughout the 1970s, a group of private equity firms, focused primarily on venture capital investments, would be founded that would become the model for later leveraged buyout and venture capital investment firms. In 1973, with the number of new venture capital firms increasing, leading venture capitalists formed the National Venture Capital Association (NVCA). The NVCA was to serve as the industry trade group for the venture capital industry. Venture capital firms suffered a temporary downturn in 1974, when the stock market crashed and investors were naturally wary of this new kind of investment fund.
CDOcollateralized debt obligationsCDOs
Investors also benefit from the diversification of the CDO portfolio, the expertise of the asset manager, and the credit support built into the transaction. Investors include banks and insurance companies as well as investment funds. Junior tranche investors achieve a leveraged, non-recourse investment in the underlying diversified collateral portfolio. Mezzanine notes and equity notes offer yields that are not available in most other fixed income securities. Investors include hedge funds, banks, and wealthy individuals. The underwriter of a CDO is typically an investment bank, and acts as the structurer and arranger.
UBS AGUBS Investment BankUBS Warburg
With around 2,300 employees in 23 countries, UBS Asset Management is the largest mutual fund manager in Switzerland, a leading fund house in Europe, and one of the largest hedge funds and real estate investment managers in the world. It has main offices in Chicago, Hong Kong, London, New York, Singapore, Sydney, Tokyo, and Zürich. With the aim to generate systematic products and solutions for client, in 2017, UBS integrated Equities, Fixed Income and Solutions capabilities and hedge funds business within a new area named Investments.
Bain Capital PartnersSankaty AdvisorsBain
With approximately $30 billion of assets under management, Bain Capital Credit invests in a wide variety of securities, including leveraged loans, high-yield bonds, distressed securities, mezzanine debt, convertible bonds, structured products and equity investments. In 2017, Bain Capital Credit closed its first credit fund in Asia, focusing on distressed debt in the region. Bain Capital Credit has also pursued distressed debt strategies in Europe. In November 2018, Bain Capital Credit took Specialty Finance, a business development company, public through an IPO.