Hedge Funds: Quantitative Insights (The Wiley Finance Series)

"This is a landmark book on quantitative approaches to hedge funds. All those with a stake in building hedge fund portfolios will highly profit from this exhaustive guide. A must read for all those involved in hedge fund investing." -Pascal Botteron, Ph.D., Head of Hedge Fund Product Development, Pictet Asset Management

"François-Serge Lhabitant's second book will prove to be a bestseller too - just like Hedge Funds: Myths and Limits. He actually manages to make quantitative analysis 'approachable'- even for those less gifted with numbers. This book, like its predecessor, includes an unprecedented mix of common sense and sophisticated technique. A fantastic guide to the 'nuts and bolts' of hedge fund analysis and a 'must' for every serious investor." -Barbara Rupf Bee, Head of Alternative Fund Investment Group, HSBC Private Bank, Switzerland

"An excellent book, providing deep insights into the complex quantitative analysis of hedge funds in the most lucid and intuitive manner. A must-have supplement to Lhabitant's first book dealing with the mystical and fascinating world of hedge funds. Highly recommended!" -Vikas Agarwal, Assistant Professor of Finance, J. Mack Robinson College of Business, Georgia State University

"Lhabitant has done it again! Whereas most books on hedge funds are nothing more than glorified marketing brochures, Lhabitant's new book tells it how it is in reality. Accessible and understandable but at the same time thorough and critical." -Harry M. Kat, Ph.D., Professor of Risk Management and Director Alternative Investment Research Centre, Cass Business School, City University

"Lhabitant's latest work on hedge funds yet again delivers on some ambitious promises. Successfully bridging theory and practice in a highly accessible manner, those searching for a thorough yet unintimidating introduction to the quantitative methods of hedge fund analysis will not be disappointed." -Christopher L. Culp, Ph.D., Adjunct Professor of Finance, Graduate School of Business, The University of Chicago and Principal, Chicago Partners LLC

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All Customer Reviews
Average Customer Review:
1 of 1 people found the following review helpful:

A solid quantitative starting point, 2008-04-28
If you come from a background of very limited knowledge about hedge funds, this book is a great first step. I had to read and study this book for my CAIA Level-1 exam.

The book covers a lot of MBA-level finance concepts and applies them to the fairly new world of hedge funds. It begins with risk and return statistics and continues on with covariance, correlation, and regression analysis. It delves into databases, indexes, and benchmarks, which is a pretty new concept in alternative assets, as well as style and cluster classification. It also considers hedge funds from a diversified portfolio perspective and deals a lot with risk budgeting and risk management.

It's a solid book and it a good first step if you're interested in the quantitative side of funds. The quantitative insights aren't that new for a student of finance, but they are taught from the perspective of applying them to the management of a fund. I would recommend this book to those who aren't already well-versed in finance and are interested in the basics of hedge funds.


5 of 9 people found the following review helpful:

A bit disappointing, 2006-10-15
Honestly I was surprised to see the book is founded on the mainstream economic theory when the hedge fund industry itself is an idealization of alternative thesis. There is no quantitative insight whatsoever into the hedge fund strategies there, even though the author does provide useful information for anyone interested in understanding the bits of this secretive industry. In my humble opinion, the book should have moved beyond those generic topics to how the quantitative models are derived and which fields of knowledge are assisting in that endeavour, ie quantum mechanics, chaos theory, etc. Instead of those interesting insights, I got a recap of what a MBA student learns in her first semester in finance class, coupled with some considerations about how to put upon the microsope the hedge fund historical data.

Notwithstanding all this, I am still confortable with 3 stars here because the area is still a black box and certainly is not easy to write a book on the topic without falling into the trap of vagueness since eventually all successful funds have tight non disclosure agreements with their R&D staff to prevent leaks. At the end, the public is only informed of those strategies and insights have lead to disaster in hedge fund collapse, ie LTCM in 98 while the sucessful quantitivative insights are kept secret at least until they prove unsuccessful.


28 of 30 people found the following review helpful:

Somewhat misleading title, but good book, 2005-04-01
I bought this book with the hope that finally I would learn how hedge fund strategies should be implemented in a quantitative and practical way. What a delusion I was under! Suffice to say that I regretted this purchase. You will not learn about investment strategies here, so if this is your motivation, look somewhere else (Lhabitant's first book "Hedge Funds: Myths and Limits" is better on investment strategies, but only in a qualitative way). All the same, I have found some use for this book. If you want a review of finance/investment theory like asset pricing models (CAPM, APT), risk and return measurement, regression analysis, etc. the book will do just fine. I recommend looking at the table of contents to see if this book suits your purpose. I have found chapter 5 on hedge fund indices, and the problems with these, very useful. Also, chapter 9 on style analysis is good, as well as chapter 8.5 on hedge funds as option portfolios which summarizes the scientific papers by Fung, Agrawal and those guys. However, you will find most of the book's topics in finance textbooks used in graduate schools, but if you haven't read those, I guess this book will be very useful for you.

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