Alternative Investments Flashcards
A document, prepared by the dealer, for a new issue outlining some of the salient featurs of a new headge fund issue, but not the price or other issue-specific details
Offering memorandum
A fund whose portfolio consists only of a variety of hedge funds
Fund of Hedge funds
The level of ongoing information regarding investment products, evaluated on level of detailed provided, frequency of commonication and time between fund reporting date and date of communication to investors
Product transparency
A type of mutual fund (liquid alternatives) permitted more use of derivatives, leverage, short selling and investments in illiquid assets than conventinal mutual funds, but less than hedge funds
Alternative MFs
The curve that reflects the most efficient portfolios for all levels of risk
Efficient Frontier
An individual or institutional investor who meets certain minimum requirement relating to income, net worth, or investmnet knowledge
Accredited investor
A measure that ensures that a hedge fund manager is paid incentaive fees only on net new profits
High-water mark
A type of risk that refers to the exposure to changes in the general direction of equity, fixed income, currrency, and commodity markets
First-order risk
An investor exemption from receiving a prospectus based on a prescribed minimum investment
Minimum investment exemption
A type of risk related to aspects of trading, which might include liquidity, leverage, deal breakage, concentration, and trading model risks
Second-order risk
The rate that a headge fund must earn before its manager is paid an incentive fee
Hurdle rate
The risk related to the alternative strategy fund as a business entity
Operational risk
