The Little Book of Hedge Funds

Contents

Foreword

Introduction

Chapter One: What is a Hedge Fund?

Comparing Apples to Oranges

Regulation . . . or Lack Thereof

Size: The Achilles’ Heel

Manager Fee: The Infamous Two-and-Twenty

Investment Strategies: The Long and the Short of it

Liquidity: Swimming in Pools of Money

So, Do they Actually Hedge?

The Proof is in the Pudding

Chapter Two: The Parlor Cars of the Gravy Train

Inside the Olive Pit

The Secret is in the Sauce

And the Beat Moves On . . .

The Revenge of the Nerds

And Now for the Not-Quite-as-Successful

Emerging from the Ashes

Where Are We Now?

Chapter Three: Accessing the Inaccessible

It’s All in the Name

The Institutional Invasion

Take Out Your Measuring Stick

What It Boils Down To . . .

Chapter Four: Heads We Win; Tails you Lose

Keeping Up with the Joneses

The Ends Justify the Means

Even Cowboys Have the Blues

Chapter Five: The Alpha Game

The Alpha-Beta Song

Another Theory, Another Definition

Driving with One Foot on the Brake

Putting Theory into Practice

A Word of Caution

Sometimes Diversification Just Ain’t Enough

The Bottom Line

Chapter Six: Ironing Out Inefficiencies

A Kid in a Candy Store

Times, They Are a Changing

Living on the Edge

Putting Theory into Practice

The Efficiency of Inefficiency

The Fact of the Matter . . .

Chapter Seven: A Balancing Act

Long/Short Equity—Borrowing from Peter to Pay Paul

Relative Value—Two of a Kind . . . but Different

Event Driven—One Man’s Loss is Another Man’s Gain

Directional

Chapter Eight: If you Can’t Beat ’Em, Join ...