Hedge Fund Risk Fundamentals: Solving the Risk Management and Transparency Challenge [Hardcover]

Richard Horwitz (Author), Ramon Koss (Foreword)

Book Description

Publication Date: August 11, 2004 | Series: Bloomberg Financial (Book 70)

In the constantly evolving hedge fund marketplace, nothing is more central--but in many ways, more amorphous and elusive--than risk. Yet there remains no standard for analyzing and measuring risk within this highly secretive, largely unregulated field, leaving the thousands of hedge funds--and the tens of thousands of hedge fund investors--in dangerously dim light. The industry has not solved the "transparency" challenge--communicating risk to investors without disclosing proprietary information.

Hedge Fund Risk Fundamentals is the first book to bring these issues to the forefront. With clarity, concision, and minimal math, Richard Horwitz lays out the key components and the cutting-edge processes in the field of hedge fund risk management today. Against that backdrop, he presents a groundbreaking utility destined to set the standard for transparency and risk management within the hedge fund universe.

You’ll learn why, when it comes to risk management, 1 + 1 = 1.41. For all of those perplexed by the difficulties of assessing risk in hedge fund investing, Horwitz’s concepts make for an invaluable road map and a demystifying resource that hedge funds and investors at all levels will find indispensable.

Editorial Reviews

Review

"Hedge Fund Risk Fundamentals contains an abundance of helpful information for investors who want to understand the intricacies and risk dynamics of hedge funds. The book is written with commendable clarity and provides a valuable glimpse into the workings of a rapidly growing investment vehicle." (Financial Analysts Journal)

Review

"A wonderfully written book on a topic that has vexed investors and professionals alike--balancing the need to know against the desire to provide information. In a thorough and comprehensive manner, Richard Horwitz takes the reader on an explanatory journey through the risks associated with hedge fund investing. His insight and experience give him the perspective needed to articulate the challenges faced by this industry, as well as offering a sound solution that I believe couldn't come soon enough."
—Andrew A Kandiew
Managing Director, Risk Management
Commonfund

"Richard Horwitz has produced a work of exceptional practical value. This book deals head-on with the challenges of hedge fund investing by providing intelligent, well-informed, and uniquely accessible advice. Most usefully, he provides a benchmark for hedge fund investors to evaluate their own investment processes."
—Andrew B. Weisman
Director of Risk Management and Research, Strativarius Capital Management, LP

"Required reading for anyone who wishes to understand the fine points of hedge fund risk measurement."
—Steve McMenamin
Chairman, Greenwich Roundtable

"Not overly technical, this book is not only a must-read for neophytes and the newly indoctrinated to risk on derivatives but also a great refocuser for risk professionals!"
—Robert M. Aaron
Chairman and CEO, Derivatives Portfolio Management, LLC
Member of the Board, Managed Funds Association

"A comprehensive, eye-opening account on risk management which should be read by investors and managers alike."
—Lois Peltz
President and CEO, Infovest21

"This book offers an excellent review of the complex topic of hedge fund risk management. Furthermore, it provides an innovative and pragmatic solution to the key transparency issue."
—Pierre Jette, MBA, CFA
Associate Vice President, Equity Markets, CDP Capital

"Richard Horwitz provides a invigoratingly fresh and engaging perspective on hedge funds, risk management and investing principles. Practitioners all too often forget the basic principles of quantitative risk management, and thus obscure rather than illuminate the trade off between risk and reward. This book eloquently bridges the divide between the 'theory' and the 'practice' of investing in hedge funds."
—Adil Abdulali
Director of Risk Management, Protégé Partners

See all Editorial Reviews

Product Details

• Hardcover: 308 pages
• Publisher: Bloomberg Press; 1 edition (August 11, 2004)
• Language: English
• ISBN-10: 1576601633
• ISBN-13: 978-1576601631
• Product Dimensions: 9.3 x 7.7 x 1.1 inches
• Shipping Weight: 1.8 pounds
• Average Customer Review: 3.5 out of 5 stars  See all reviews (4 customer reviews)
• Amazon Best Sellers Rank: #2,126,628 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

4 of 6 people found the following review helpful:

5.0 out of 5 stars Highly Recommended!, December 21, 2004

By 

Rolf Dobelli "getAbstract" (Switzerland) - See all my reviews
(HALL OF FAME REVIEWER)    (TOP 500 REVIEWER)    (REAL NAME)   

This review is from: Hedge Fund Risk Fundamentals: Solving the Risk Management and Transparency Challenge (Hardcover)

Hedge funds are complex, risky investment vehicles. Other funds, such as most equity mutual funds, have straightforward investment strategies. By contrast, equity-oriented hedge funds may engage in various trading practices and investment strategies. They may be short funds, long-short funds or market neutral funds. And equity-oriented hedge funds are only a small sliver of the hedge fund universe. Thus, assessing the risk of hedge funds is a challenge. In language intelligible to most lay readers, author Richard Horwitz lays out the issues to consider when evaluating hedge fund risks. He has accomplished a great deal merely by writing this in readable prose, instead of in equations. He also explains his company's hedge fund risk measurement system. We believe every hedge fund manager and anyone who even thinks of investing in a hedge fund should read this book.

4 of 6 people found the following review helpful:

5.0 out of 5 stars A new look at hedge funds and risk, November 1, 2004

By 

Daniel Lim (New York, NY USA) - See all my reviews
(REAL NAME)   

This review is from: Hedge Fund Risk Fundamentals: Solving the Risk Management and Transparency Challenge (Hardcover)

With the increasing universe of alternative investments, comes a more difficult and complicated task of selection for many sophisticated investors. From quantitative analysis to qualitative assessment, this book covers a full spectrum of topics. It offers an interesting perspective and methodology in breaking down risks associated with investing in these highly complex and opaque strategies. Where transparency has always been an issue, it's like a breath of fresh air to finally find a method that satisfies both the disclosure-hungry investor, and the secretive hedge fund. The platform offers a unique way of bucketing and aggregating risks into logical styles and factors, which ultimately strips away the need for full position-level transparency. The comprehensive and flexible system allows investors to take advantage of useful tools and measurements that will aid them in better assessing risks and managing their portfolios. Finally, a book written for the risk gurus of the hedge fund world.

3.0 out of 5 stars Insightful, December 31, 2011

By 

HeavensKrow (Singapore) - See all my reviews

This review is from: Hedge Fund Risk Fundamentals: Solving the Risk Management and Transparency Challenge (Bloomberg Professional Library) (Bloomberg Financial) (Paperback)

Shows the reader how some hedge funds look and measure risk. A lot of finance lingo and very complicated material.. If you want a view of how some hedge fund guys look at their portfolio....I would pick this book up...However if you are wanting to pick up a book that's easily under-stable I would stay away. Overall a very interesting book for anyone serious about starting up a hedge fund...However be ready to spend a good time figuring out some formulas for those math deficient.