Managing a Hedge Fund

Hedge funds have become one of the most-discussed yet misunderstood players in today's investment marketplace. They have also become one of the most potentially rewarding, both for investors and successful fund managers. Managing a Hedge Fund explores the numerous vital issues in launching and managing a hedge fund, and is the one book guaranteed to help both investors and professional money managers demystify the inner workings of this increasingly popular vehicle. This book is also appropriate for graduate students in business and finance.

Topics covered include:
· Measurement of a wide range of risks, including liquidity, counterparty, operational, market, legal, transparency, and model risk
· Strategies for many different types of hedge funds, including fixed income, global macro, managed futures, and distressed investing
· Traditional investments versus alternative investments in terms of return, risk, and overall effects on a portfolio
· An overview of a number of hedge fund strategies, including strategies for combining diverse hedge fund styles to minimize fund volatility

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All Customer Reviews
Average Customer Review:
7 of 9 people found the following review helpful:

Excellent Primer on Hedge Funds, 2006-04-26
If you aren't familiar with hedge funds and need a book that explains it in layman's terms, this is the book for you. The title is a little misleading since it should be more appropriately named "A Primer on Hedge Funds" The author introduces what hedge funds are and its affects on portfolio performance and then explains various hedge fund strategies and how to measure hedge fund performance. The wealth of data presented in the book is well worth the money by itself. The author presents information such as tables on the Sharpe Ratios by strategy, Sortino Ratios by strategy, as well as correlations of the various hedge fund strategies to each other and to the S&P 500 during up and down markets and to the MSCI Debt index in up and down markets. The text is well written and an easy read. If you want more details on hedge funds in highly quantitative terms and have the background to understand them then you're better off reading articles from the Journal of Finance, Journal of Derivatives, Journal of Fixed Income, or other publications of this nature. Overall, if you are new to hedge funds and want to get your bearings on this hot topic, then this book is an excellent starting point.


3 of 6 people found the following review helpful:

Straight Forward No-Nonsense Approach to Understanding Hedge Funds, 2006-02-08
Mr. Black's book on hedge funds offers a straightforward no-nonsense approach to understanding hedge funds. The book is written in such a way that a person not enrolled in a masters degree in finance can get a basic understanding of fees, the various strategies and the required due diligence of the funds. As hedge funds are obviously becoming more and more mainstream, it is imperative that the general public has a source, which describes to them how hedge funds work and how it applies directly to them. This book is said source and should be viewed as such.

As a student of Mr. Black's and of the school where he teaches, I have found him insightful and inspiring during lectures. He combines current market trends and various hedge fund scandals into the discussion making the topic come alive and real. In my opinion, he is an asset to the school and any student who has the opportunity to take his course should seize it!



3 of 19 people found the following review helpful:

Full of usual topics , 2006-01-08
The MS program at the school where Keith Black teaches finance is far from good and totally pathetic. The program director at this school John Bilson and Dean Zia Hasssan individually or as a faculty group lacks the edge and seriousness to run a full fledged program. They had no time or showed any inclination to grade student test papers. The course ciuricullum is vague and they avoided teaching intricate mathematical models to students. These models have been the foundation for evolution of hedge funds or in the development of advanced portfolio managment techniques. Therefore the classroom projects used by this author is a poorly conceived idea for writing a book on such critical topic in finance. To understand hedge funds and to gain expertise it is absolutely not necessarty to even touch such a book. There are definitely better written books.


3 of 21 people found the following review helpful:

A hedge fund book among many, 2006-01-02
The Author is a below average teacher. This book is likely to establish this fact more than teaching the reader about hedge funds.


28 of 30 people found the following review helpful:

If you are a true buy-side prospect, this is kindergarten...., 2005-10-28
I am afraid I have to agree with the review here of Robert Altena wholeheartedly. This book simply describes the very basics of several investment strategies (most of which have existed for decades). Hedge funds have long ago moved beyond any of these strategies, although the obviously still employ all of them as a bulk of their operations, and they constantly move into uncharted territory. That is what is separating the top funds from the `pretenders' nowadays.

If these strategies are new to you and/or if you actually learned anything new from this book then you have NO business trying to start a hedge fund. Of course if you need to buy a book to consider doing so, then you are really in trouble anyways. This book is useful however for anyone that is considering putting their money with [reputable] hedge fund managers and therefore need to educate themselves on various basic strategies the funds may employ (thus why I gave it 2 stars instead of 0 or 1).

I think Mr. Black is an excellent professor and his writing in this book is pretty good, but the title is very misleading. A more accurate title may have been: The Basic Hedge Fund Strategy for Investors. For those who already work at buy-side institutions (or serious prop traders at bulge bracket firms), if you plan to branch out on your own please do not think ANY book will aid you in your quest. Instead, if you need insight into risk management, quant, partnership accounting, etc. in order to complete your education BEFORE starting a fund (recommended that you do!), then consider reviewing published industry papers from Wharton, MIT, Cal Tech, Chicago B.S., HBS, NYU, etc. (I would put particular concentration on the top finance and tech schools and not the top management schools - MIT, Wharton, NYU, etc.) These offer the best academic insight into how funds should be managed, in theory anyhow, in truly technical jargon. If you can't understand the jargon, then stick with working with your broker or day trading because starting a hedge fund will only put you into bankruptcy.

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