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Rogers terms Flashcards

1
Q

40 act fund

A

A fund registered under the 1940 investment company act that provides transparency, regulatory oversight, and investor protection such as mutual funds and ETFs

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2
Q

Abenomics

A

Implemented by Abe in 2012. 3 Pillars: Monetary Easing, boosting gov spending, and reforms to make Japan more competitive.
Results? Some periods of success but failure to maintain 2% inflation target, long term success in question

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3
Q

Active / Index management

A

Active tries to outperform the index and managers are pick stocks and timing whereas index tries to emulate market

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4
Q

Activist

A

An investor who buys stakes in companies to try to change how they’re run i.e. give more dividends, improve operations

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5
Q

ADV

A

A document required for investment advisors that details their business practices, fees, disciplinary history. They need it to register with regulatory agencies

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6
Q

Alpha

A

Measure of performance relative to market

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7
Q

Angel investors

A

Rich private investors who use their own money to invest in small companies

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8
Q

Anti-Dilution

A

Clauses that allow investors to maintain their ownership percentage when new shares are issued

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9
Q

Arbitrage

A

Buying a security and then selling it in another market for a higher price, allowing you to take advantage of momentary differences in markets

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10
Q

AUA

A

Assets Under Administration: you can only advice on the assets

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11
Q

AUM

A

Assets Under Management: you can actually trade the assets

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12
Q

Back Office

A

Admin and support personnel, not client-facing i.e. IT, regulatory

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13
Q

Basis risk

A

The potential risk that arises from mismatches in a hedged position.

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14
Q

Benchmark

A

A standard or measure used to analyze risk and return of a portfolio

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15
Q

Beta

A

Measures the relative volatility of an investment and is an indication of relative risk

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16
Q

Black Swan

A

A really bad event that is impossible to predict

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17
Q

Bps (Basis Points)

A

unit of measure to describe the percentage change in value of a financial instrument

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18
Q

Burn

A

Rate at which a company spends its cash over time

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19
Q

CAGR (Compound Annual Growth Rate)

A

Annualized average rate of growth of revenue between two given years

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20
Q

Cap Table

A

A document that shows who has ownership of a company. Includes a list of all securities, stocks etc

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21
Q

Capital Introduction

A

Describes the introductions that a prime brokerage firm makes on behalf of its money managers by introducing hedge fund clients to hedge fund investors

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22
Q

Carry/ Carried interest

A

Share of profits paid by PE, VC or Hedge Fund paid as incentive to compensation to the fund’s general partner

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23
Q

Catch Up

A

Takes effect when an investors returns reach the defined hurdle rate, giving them an agreed level of preferred return

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24
Q

CB (Convertible Bond)

A

A debt instrument that can be converted into a predetermined number of common stock or equity shares

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25
Q

CB-Arb

A

Strategy that aims to capitalize on mispricing between CB and its underlying stock

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26
Q

CFD (Contract for differences)

A

A contract that pays the differences in the settlement price between the open and closing trades. Illegal in the US because it is an over-the-counter cash payment

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27
Q

Churn

A

Excessive trading of assets in a client’s account to rack up commission: illegal

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28
Q

CIMA

A

Certified Investment Management Analyst: Takes 4-5 years to get

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29
Q

CIS

A

Collective Investment Schemes, or mutual funds

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30
Q

Core-Satellite

A

Investment method: core are passive investments that track major indices. Satellites are actively managed

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31
Q

Crystallization

A

When a trader closes a position and immediately reopens it. Allows them to balance out net value of assets by quickly realizing a loss or profit without losing their position

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32
Q

CTA (Commodity Trading Advisor)

A

Advises others on trading futures contracts, options on futures

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33
Q

CFTC (Commodity Futures Trading Commission)

A

Regulatory body in the US

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34
Q

Custodian

A

An institution that holds securities in physical or electronic form to minimize risk of theft or loss

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35
Q

DCF

A

Discounted Cash Flow - a method of valuation based on its predicted cash flow in the future

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36
Q

DD

A

Due Diligence - an investigation of a potential investment

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37
Q

Delta

A

the estimate of how much an option can change in value based on a $1 change in the underlying security. Ranges from -1 to +1

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38
Q

Dodd Frank

A

Act to promote financial stability and make markets more transparent. Passed in 2010

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38
Q

Drag Along/ Tag Along

A

a drag along right is an agreement that allows a majority shareholder to force a minority shareholder to join in the sale of the company
Tag Along protects minority shareholders in VC deals. if a majority sells their stake, it gives the minority the right to also sell theirs

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38
Q

Equalization

A

Means of ensuring that every investor is charged their fair share of performance fee based on how their fund has performed

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39
Q

Event Driven

A

A hedge fund strategy that aims to exploit price inefficiencies before a corporate event

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39
Q

ERISA (Employee Retirement Income Security Act)

A

sets the minimum standards for retirement and health plans in private industry

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39
Q

ETF (Exchange Traded Fund)

A

Pre-defined set of bonds, stocks or commodities that people can invest in

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40
Q

Family Office

A

a private company that handles wealth management for a wealthy family

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40
Q

Fat tail

A

Describes an usually high percentage of extreme values. Tail as in in a bell curve

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41
Q

FATCA (Foreign Account Tax Compliance Act)

A

Requires foreign financial institutions to report on assets held by US accounts

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42
Q

Fee waterfall

A

Higher tiered receive interest and principal payments and lower tiered only receive only interest

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43
Q

Fiduciary

A

Someone who manages assets for someone else

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44
Q

Flash Crash

A

A rapid drop in prices in a market or stock’s price due to a withdrawal of orders followed by a quick recovery

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45
Q

FOF (Fund of Funds)

A

A fund comprised of stocks from another fund instead of investing directly into securities

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46
Q

Form ADV

A

Every investment advisor must submit this to the SEC to register as one

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47
Q

Fund Administrator

A

Independently verify the fund assets and valuation under a manger’s portfolio. They do the back office paperwork

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48
Q

Fundamental Analysis

A

Uses a company’s revenues, earnings, returns to value it

49
Q

Futures

A

A type of derivative agreement to buy or sell a product at a set future date and a set price

50
Q

FX

A

Foreign Exchange Market - global over-the-counter market for exchanging currencies

51
Q

GAAP

A

Generally Accepted Accounting Principles: standards that encompass the details, complexities, legalities of business accounting

52
Q

Gate

A

Tool to determine the liquidity of a hedge fund. e.g. A fund with 10% gate provision means only 10% of its assets can be withdrawn by all investors in total over a single period

53
Q

GAV

A

Gross Asset Value: current value of all assets held within a property fund

54
Q

Glass Steagall

A

1933 and separated commercial from investment banking to protect depositors from losses from stock speculation

55
Q

GP

A

General partner, they make the decisions on the fund

56
Q

Hard and Soft closed

A

Accounting techniques: hard is closed-book and no possibility of future financial data changing numbers, soft is more ambiguous and books remain open

57
Q

Hedging

A

Buying and selling an investment to reduce the potential loss

58
Q

HFT

A

High Frequency Trading: using a computer to execute high number of trades at once

59
Q

HNW

A

High Net Worth: $1-5 million

60
Q

Hurdle

A

Minimum acceptable rate of return for an investment to be financially viable

61
Q

HWM

A

High Water Mark: highest peak of value an investment reached

62
Q

IRR

A

Internal Rate of Return: metric used to analyze profitability of an investment. Discount rate that makes the NPV (Net present value) equal zero in a DCF

63
Q

ISDA

A

International Swaps and Derivatives Association: private trade organization whose members, mainly banks, transact in OTC market

64
Q

ITD

A

Inception to Date balances represent the total activity, both actual budgeted, that has occurred since the start of a project

65
Q

J-Curve

A

Shows that investments may have an initial loss, but has dramatic gain after

66
Q

JGB

A

Japanese Government Bonds

67
Q

JOBS ACT

A

Allows companies to access funding in ways that were not allowed before due to regulations. Reduced regulation

68
Q

Key man

A

Important employee that is core to operations

69
Q

KYC

A

Know Your Costumer: process of identifying and verifying identity

70
Q

L/S

A

Long/ Short equity: a strategy with a mix of long and short positions

71
Q

Liquidation preference

A

A clause in the contract that guarantees that some investors get their money back before some others in the case of a corporate liquidation

72
Q

Liquidity

A

How easy an asset can be converted into cash, how easy you can buy or sell an asset without changing its price

73
Q

Local ID Market

A

Trading market usually only accessible by banks and financial institutions

74
Q

Lockup

A

Agreements that prohibit company insiders (including friends and family) from selling their shares for a period of time after an IPO

75
Q

LP

A

Limited Partnership: there is one GP and LPs don’t manage the business

76
Q

Macro

A

How economic fluctuations affect asset prices

77
Q

Madoff

A

Largest Ponzi scheme in history: he attracted investors and used their funds to pay off old investors

78
Q

Market/ sector/ style - neutral

A

Strategy that seeks to avoid market risk entirely and profit from both increasing and decreasing prices

79
Q

Master feeder

A

A device commonly used by hedge funds to pool taxable and tax-exempt capital from investors in the US and abroad from “feeder” funds into a master fund

80
Q

Merger Arbitrage

A

Trading in stocks of companies that are involved in proposed takeovers or mergers e.g. buying a targeted company for a discount price, betting the deal goes through

81
Q

MFO

A

Multi-Family Offices: managing the wealth of a few affluent families

82
Q

Middle Office

A

Between front and back office, manages risk and calculates P&L

83
Q

MTD

A

Month to Date: the period starting from the current month’s beginning till the most recent date

84
Q

MTM/ M-T-M

A

Method of measuring the fair value of assets that may fluctuate over time

85
Q

Multi-Strategy

A

Funds that use multiple strategies

86
Q

NAV

A

Net Asset Value: a company’s assets minus liabilities

87
Q

NDA

A

Non-Disclosure Agreement: promise that you can’t leak disclosed financial agreements

88
Q

NDF

A

Non-Deliverable Forward: foreign exchange derivatives contract where two parties agree to exchange cash at a given date

89
Q

NFA

A

Net Foreign Assets: Net amount of foreign assets that a country owns

90
Q

OM

A

Offering Memorandum: a legal document that details objectives, risks and terms of an investment involved in a private placement in real estate

91
Q

Onshore/ Offshore

A

Onshore activity is in your home country, offshore is foreign

92
Q

Open ended fund vs close end fund

A

Open-end fund issues new shares whenever new investors choose to buy into it and repurchases them when they’re available, close end funds only issue shares once

93
Q

OTC

A

Over the Counter, no regulator, informal

94
Q

PE

A

Private Equity: Owning private companies

95
Q

PFIC

A

Passive Foreign Investment Company: a foreign (non-US) company that exhibits one of the two tests: 1. 75+% of its gross income is passive income, 50+% of its assets produce passive income

96
Q

PIK

A

Payment In Kind: Use of a service or good as payment instead of cash

97
Q

PPM

A

Private Placement Memorandum: A legal document used by owners of private companies for prospective investors

98
Q

Pre-money/ past-money

A

pre: a valuation of a company before any outside investments, post is after outside investments

99
Q

Prime broker

A

Institutions that conduct complex financial trading, like investment banks

100
Q

Record Date

A

Set by the board of directors, the date on which the company compiles a list of shareholders of the stock for which it has declared a dividend

101
Q

Rehypothecation

A

Where banks, brokers and individuals use collateral that they don’t own to help finance assets

102
Q

Relative value

A

Method of determining an asset’s value that takes into account the value of similar assets

103
Q

Safe harbor

A

A legal provision to reduce legal and regulatory liability in certain cases where certain conditions are met

104
Q

SEC ERA

A

Exempt Reporting Advisors are advisors that are not required to register with the SEC (Securities and Exchange Committee) but still must pay fees and give public reports

105
Q

Seeder

A

Equity-based funding, in the very early stages of a startup.

106
Q

SESC

A

Securities and Exchange Surveillance Commission: Japanese agency under FSA, ensures fair transactions in both securities and financial futures markets

107
Q

SFC

A

Securities and Futures Commission: non-governmental body in Hong Kong that regulates securities and futures markets

108
Q

Share Series

A

A class of shares is a category of stock that may have different voting rights and dividends. Series are a subclass of class

109
Q

Sharpe

A

Ratio that is one of the most widely used methods for measuring risk-adjusted returns. Compares a fund’s historical or projected returns relative to an investment benchmark with the historical or expected variability of such returns

110
Q

Side letter

A

Agreements between fundraisers and investors that provide certain rights, privileges and obligations outside the standard investment document’s terms

111
Q

side pocket

A

Way of separating problem assets from the rest of the fund until the problem is resolved, i.e. assets affected by Ukraine War

112
Q

Soft dollar

A

Commission payments to a brokerage firm that are used, in part, to pay for other services such as research

113
Q

Sortino Ratio

A

Risk-adjustment metric used to determine the additional return for each unit of downside risk. It is computed by first finding the difference between an investment’s average return rate and the risk-free rate.

114
Q

Stock Connect

A

Mutual Market Access program through which investors in the Mainland China and Hong Kong can trade and settle shares listed on the other market via the stock exchanges and clearing houses in their home market

115
Q

SWF

A

Sovereign Wealth Fund: an investment fund owned by the state

116
Q

Technical Analysis

A

Using price-data and volume data to analyze securities, often using charts

117
Q

Total Return Swap

A

a financial contract that transfers both the credit risk and market risk of an underlying asset

118
Q

UCITS

A

undertaking for collective investment in transferable securities

119
Q

UHNW

A

Ultra High Net Worth: over $30 million

120
Q

Unit Trust

A

a type of mutual fund where money from many investors (called “unit holders”), is managed by a fund manager to achieve a specific return

121
Q

Value Date

A

when funds are posted to an account and available for immediate use

122
Q

VaR

A

Value at Risk: a measure of the potential loss that an asset, portfolio, or firm might experience over a given period of time

123
Q

VWAP

A

Volume-weighted Average Price: measurement that shows the average price of a security, adjusted for its volume

124
Q

Waterfall

A

how the cash from an investment flows down to the different parties involved.

125
Q

Yard

A

financial term meaning one billion

126
Q

YTD

A

Year to Date: a term covering the period between the beginning of the year and the present

Rogers terms (1 decks)

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