Alternative Investments

Prerequisites
Basic finance, basic math

Objectives

Understand different categories of alternative investments, such as hedge funds, commodities, credit derivatives, private equity, venture capital and real estate.

Description / Program

This course provides both a theoretical and practical look into the world of managing alternative investments such as hedge funds, commodities, private equity, venture capital, LBOs. With regards to hedge funds we will focus on their strategies, including market neutral investing, statistical arbitrage and derivatives arbitrage. Topics include hedge fund compensation, performance evaluation, risk management, including operational risk, and the role of arbitrageurs in the capital market. In terms of commodities we discuss various instruments to invest in commodities and discuss the emergence of commodities as an asset class. Furthermore, we discuss the basics of venture capital investments and the different stages of the investment process. We look at valuations of VC and PE investments and discuss simple examples and case studies illustrating how returns are generated by VC and PE funds. Finally, we also discuss real estate as an asset class and consider how real estate investments are a worthwhile addition to a diversified investment portfolio.

Learning Method / Style of Lessons
In-class teaching only if travel restrictions allow. Otherwise pre-recorded (online) lectures, on-line (zoom) teaching and exercises.

Exam Style
Final exam (closed book) and group presentations (online or in-class depending on circumstances)

Readings/Textbooks
Mark J. P. Anson, Handbook of Alternative Assets, John Wiley & Sons (2006)
Andrew W. Lo, Hedge Funds: An Analytic Perspective, Princeton University Press (2010)
Ludovic Phalippou, Private Equity Laid Bare (2017) http://pelaidbare.com
Lecture slides