The Hedge Fund Handbook: A Definitive Guide for Analyzing and Evlaluating Alternative Investments (Hardcover)

by Stefano Lavinio (Author) "Hedge funds are investment vehicles structured as either private partnerships or offshore companies (see App. 1 for a general description of hedge funds and their..." (more)
Key Phrases: detecting leverage, fund manager skills, hedge fund returns, Lara Capital, Global Systems, Hapless Fund (more...)

Editorial Reviews

Product Description
Hedge funds--one of today's most popular and lucrative investments for high net-worth individuals--also carry tremendous risk for the unwary. The Hedge Fund Handbook provides new tools and frameworks for understanding these complex funds, with the emphasis on risk measurement and management. Extensive charts and graphs demonstrate the inadequacies of traditional methods of analysis while offering the reader a striking new method for detailed, accurate analysis.

From the Back Cover
The money manager's guide to hedge funds. What they are, how they operate, and why they belong in any well-diversified professional portfolio. The successes of hedge funds--sophisticated investments which claim to offer their investors above-average returns and greater safety than many other types of managed investments--have become legendary, but so have their losses. Eye-popping gains by George Soros and Julian Robertson have competed in the headlines of the financial press with catastrophic losses by famed fund managers Victor Niederhoffer and John Merriwether. But are qualified investors missing out on the development of one of today's most important financial innovations because of poor information and a misunderstanding of these vehicles? The Hedge Fund Handbook sheds much-needed light on the dynamcis of hedge fund behavior, providing new tools and frameworks for understanding what hedge funds are and how they operate. Filled with techniques and strategies used by a successful hedge fund manager to evaluate his colleagues, this timely book gives potential hedge fund investors an insider's perspective as they learn to: master the hedge fund basics--everything from what happens when you buy to when and how to sell; accurately evaluate a hedge fund manager's perfomance and style; use accessible math to calculate a hedge fund's chances for success; find funds and managers that can generate exceptional returns for proportionally lower risk. Some hedge funds can offer investors great opportunities. However, these vehicles, if not understood or anlayzed in an effective manner, can harm the wealth of unprepared investors. Let the insights of a successful hedge fund manager improve your ability to identify and select those hedge funds that can truly provide superior, consistent risk-adjusted returns.

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Product Details

• Hardcover: 192 pages
• Publisher: McGraw-Hill; 1 edition (December 1, 1999)
• Language: English
• ISBN-10: 0071350306
• ISBN-13: 978-0071350303
• Product Dimensions: 9.4 x 6.3 x 1 inches
• Shipping Weight: 14.4 ounces (View shipping rates and policies)
• Average Customer Review: 3.1 out of 5 stars See all reviews (10 customer reviews)
• Amazon.com Sales Rank: #1,560,137 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

15 of 15 people found the following review helpful:

1.0 out of 5 stars BEWARE!, July 2, 2000

By A Customer

I am highly skeptical of the data behind most of this book. The figures seem consistently wrong. I doubt a single set of data could give the #s shown in both Table 4.2 & Chart 4.5. I find it funny that in Charts 7.1 & 7.2, 2 managers have tremendously different gross returns, but seemingly the exact same set of monthly returns. Funny again, in Charts 8.1 & 8.2, "Best" & "Random" managers seem to have the exact same results. Are the errors in proof-reading, concept, or facts?

14 of 14 people found the following review helpful:

4.0 out of 5 stars opening the hedge fund kimono, March 28, 2000

By	palindrome91 (new york, new york) - See all my reviews

This book is far from perfect, some of the math and concepts are fuzzy if not suspect. Still, being the first hedge fund book of this kind it is an important book to own, and read. No other book currently sums up and collects in one place the many key concepts and important information needed to understand these hard to define vehicles. Many prop traders and hedge fund managers will wish it had never been written, since it will make their future marketing pitches much harder. It is with out a doubt the first book, which focuses on skills, risks and rewards in the world of hedge funds. These are the key concepts in evaluating and making succesful investments these vehicles. It has long been a dirty secret in the hedge fund business that many funds are unsatisfactory investments on a risk-adjusted basis. This book gives readers the concepts and tools to understand and make such evaluations.

In this light this book, for all its shortcomings, upsets many of the vested interests (hedge fund managers, marketers and prop traders looking to set up the next hedge fund) by allowing investors to become more educated. I have succesfully run and invested in many succesful hedge funds for over twenty years. I'm incorporating many of Mr. Lavinio's insights into both my in-house risk systems as well as the performance reports of my own hedge funds. It will be only a matter of time smart investors and regulators read this book and start demanding such information. Many concepts in this book may well become industry standards.

I my opinion those that read this book will never be unprepared or find their money invested in one of the ever-growing number of funds that lost all its investor's money.

13 of 13 people found the following review helpful:

1.0 out of 5 stars Only focuses on risk of returns and leverage, June 17, 2001

By	PGMS "PGMS" (NJ USA) - See all my reviews

Only focuses on one aspect: risk computations and leverage This book is certainly not a handbook on how to buy a hedge fund. It spends a great deal of time discussing how to disect a fund's returns mathematically. It does a good job of explaining in simple English what is wrong with using standard deviations of returns in trying to determine a fund's risk. Unfortunately, that is not all that one should consider in evaluating a fund. It does not go into detail about looking at other funds a manager may have been involved with, comparing that fund's returns to other funds in its class. It does not talk about understanding how hedge funds determine their fees, how to watch out for fraud, how to evaluate a fund's accountants and lawyers and the relative importance of these factors. It does not spend much time on discussing the risks involved due to the fact that most funds limit when one can put in or take out money or that a fund may force you to take some of your investment back. It also does not discuss tax treatment. Many funds' earnings are reportable as regular income. This may be important. The bottom line is that you can find out about risk and volatility from a stat book. It is the other behind the scenes unformation that is also critical in choosing a hedge fund.