Risk, Regulation, and Organizational Structure
The material in this chapter should be cross-referenced with Case Study 5, “A Tale of Two Hedge Funds: Magnetar and Peloton.”
Investor Risks
Hedge fund investors are exposed to portfolio level risks at each hedge fund they invest in, as summarized in Exhibit 14.1. In addition, they are exposed to hedge fund investment level risks, which include business risks, people risks, investment strategy risks, and systemic risks.
Exhibit 14.1
Another way of looking at hedge fund investor risk is to focus on five incremental risks that are more pronounced in hedge funds than in many other investment funds. ...
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