PE, Real state, Infra, Natural resources, Hedge Funds Flashcards
How a private equity gets rapidly cash?
Using the Trade Sale strategy:
Sell to some potencial buyer
REITS (real state) characteristics about benefits, tax
- Must report EPS under GAAP and IFRS
- Moderate correlation with traditional assets
HOWEVER, during market steep downs, they have high correlation
Green and brown filed difference
Brownfield - Existing infrastructure on it
Greenfield - no existing infra
Contango, backWardation is when:
CONTANGO
Futures price > spot prices
Fowardcurve is upward sloping
Little or no convenience yield
BackWardation
Future price < spot prices
Foward is downward
High convinience yield
Hedge funds and PE similarity:
Structured as partnership
Margin call is:
FM is forced to liquidate some position to go back to initial margin
Adding commodities to a portfolio prevent:
Exposure to inflation. Closely related
Master Limited Partnership is easier to value? Why?
Yes
Public traded
Example of Private Real State investment vehicle:
LP real state
Most significant drawback of a repeat sales index? Why? (Remember prices)
Sample selection bias
Use the change in prices to construct the index.
Because properties that sell in each period vary and may not represent of overall market.
Primary risk to invest in timber?
Is timber a volatile or not?
Dependence on an international competitivene context.
International and global commodity
Volatile? No
Inflation protection
Safe heaven characteristics
Fran products are:
Less flexible than wood (timber)
They need to be harvested when ripe
What is the most commonly hedge strategy for Equity? Some examples
Bottom Up (micro- macro)
Ex.
Market neutral - technical
Fundamental L/S growth
Sector specific
Short biased
Most common strategy for macro funds?
Top down (macro - micro)
