Title: Risk Management and Alternative Investments
Abstract: The events of 1994 and 1998 emphasized the importance of risk management and provided some valuable lessons for hedge fund investors. A well-informed hedge fund investor understands the importance of weighing various data and modeling issues, such as a fund's transparency (or lack thereof), composition, and liquidity or counterparty risk. Moreover, by defining upfront the risks that investors are willing to accept, using value-at-risk and simulation analyses to assess portfolio behavior under a range of market conditions, and choosing hedge fund managers carefully, investors can more realistically frame their expectations of hedge fund performance and be better equipped to handle market surprises.
Publication Year: 2002
Publication Date: 2002-04-01
Language: en
Type: article
Indexed In: ['crossref']
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