Private Equity, Alternative Funds, Hedge Funds


Concepts and Definitions

  • Convertible Arbitrage: Investment strategy that is long convertible securities and short the underlying equities.
  • Distressed Securities: Invests long (and some short) securities of companies that are in reorganizations, bankruptcies, or some other corporate restructuring.
  • Emerging Markets: Investment in securities of companies in developing or “emerging” countries. Primarily long.
  • Growth Funds: Investment in a portfolio or “core” holdings in growth stocks. Many of these portfolios are hedged by shorting and utilizing options.
  • Macro Funds: The investment philosophy is based on shifts in global economies. Derivatives are often used to speculate on currency and interest rate moves.
  • Market Neutral: Strategy that attempts to lockout or “neutralize” market risk.
  • Market Timing: Allocation of assets among investments primarily switching between mutual funds and money markets.
  • Merger Arbitrage: Invests in event-driven situations of corporations, such as leveraged buy-outs, mergers, and hostile takeovers. Mangers purchase stock in the firm being taken over and, in some situations, sell short the stock of the acquiring company.
  • Multi-strategies: Specific portions are utilized for separate strategies, e.g., growth, convertible arbitrage, and market neutral.
  • Opportunistic: Investment theme is dominated by events that are seen as special situations or opportunities to capitalize from price fluctuations or imbalances.
  • Sector Funds: Invest in companies in sectors of the economy, e.g., financial institutions or bio-technologies. These funds invest in both long and short securities and will utilize options.
  • Short Selling: Short selling of securities.
  • Derivative Funds: These funds invest in derivative instruments such as futures and options with the aim of achieving high returns.
  • Commodity Funds: These funds invest in shares of companies that operate in commodity related industries or hold physical commodities such as bullion.
  • CTA: A fund that is a Commodity Trading Advisor’s account where the trades are generally focused in commodity futures, options, and foreign exchange with a high degree of leverage.
  • Short Bias: A fund that consistently maintains a net short position to the overall market.

Organizational Charts

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