Copywriting for Capital Raising

This short video below explains why copywriting is so important and why ignoring this area can kill your progress towards raising more capital for your hedge fund.  Below is a definition of copywriting for those of you new to the subject, and if you are reading this via rss or email you will need to click here to view the embedded video on our website.

Definition of Copywriting:  The strategic use of the right words within sales letters, websites and presentations to influence others to take action.

• HedgeFundBlogger.com
• HedgeFundStartupGuru.com
• StockMarketsReview.com
• ThirdPartyMarketing.com

I recently heard Eben Pagan speak in LA at a marketing conference on how business is typically conducted.  I was reminded of that talk while I was in Boston last week for our Hedge Fund Premium networking event (which was great).

The streets in Boston were actually old cow paths that the city decided to just pave over to create the roads of the city.  The result, is a very complicated maze of one way streets which really only make sense to the most veteran cab drivers.  This is not the cows fault they simply walked typically in the direction of least resistance.  The point here is that nobody stepped back and looked at where the cows had wandered and asked if there was a better way to get the project done…they simply followed where cows had walked in the past.

Pagan’s point in telling this story was that in every business, every form of marketing and even within the hedge fund business there are cow paths everywhere.  Are you and your business wandering around on cow paths of what others have done in the past, or are you building a super highway straight towards your goal?

Areas to examine for fund administrators and fund managers could including hiring, capital raising, employee management, performance reporting, transparency, governance, and investor relations.  Our team now often steps back and looks at competitors, other industries, and steps to the work we are trying to complete to see if there is a more direct or efficient way of completing it.  Hope this story helps.
Tags: hedge fund cow paths, hedge fund processes, business processes of hedge fund managers, hedge fund managers and how they operate their small businesses

Our next networking event is coming up quickly, this Thursday we are hosting 3 speakers for short 15 minute discussions on hedge fund compliance, capital raising strategies, and pending regulations. We will then have 1 hour and 15 minutes of open networking time with food and drinks provided to attendees.


What: Hedge Fund Group and Hedge Fund Premium are hosting a seminar networking event in downtown Boston.

When: Thursday October 29th, 2009 6-8PM EST

Location: U Mass Club in downtown Boston at 225 Franklin Street, 33rd Floor Boston, MA 02110.

Sponsors: Malik Law Group & Armor Compliance

Entrance Fee: Waived, our sponsors have covered the costs of this event and not entrance fee will be required for this Boston event.

Speakers:

Tags: Boston hedge fund premium event, hedge fund premium event in Boston, hedge fund networking events in Boston MA, Boston hedge fund manager networking

One person who has affected me in business has been William Edward Deming.  He has a quote that says “If you can’t describe what you are doing as a process, you don’t know what you are doing”

I think this also goes along with another popular business quotes “What gets documented gets improved”

Most investment funds and family offices that I have worked with do not have an investor cultivation process or pipeline drawn out as a process. They do not have their ongoing investor communication strategy documented, and in many places the only documentation of their investment process is at a very high level within their marketing materials.  I think many hedge funds, portfolio managers and capital raisers could benefit from using PowerPoint or a free program such as Bubbl to document their processes.

This documenting of critical processes takes little time and costs nothing to do but allows you to step back from the process and evaluate it, improve it, or delegate where appropriate.  Our firm recently used Bubbl and PowerPoint together to describe a business process we were completing ourselves and we were able to not only use this internally but also externally as we trained a third party that we decided to outsource some of this work to.

The processes I have found to be valuable to document are:

• Investor Acquisition Process
• Current Investor Communication Strategy
• Hiring New Employees
• Managing your portfolio on an ongoing basis

Tags: William Edwards Deming Quotes, Quote by Edward Deming, W. Edward Deming, Quality Management and process improvement tips, documenting business processes for improvement

A few days ago I recorded a short video on the future of hedge funds, it centered around how hedge funds will always be around and always do very well because of their secret weapon: innovation.  Hedge Funds now invest in real estate, oil, securities, and even other hedge funds.  The entrepreneurial nature of the industry globally has develop their core strength of diverse strategies that rewards them for high performance.  It was humorous to read headlines about “The Death of Hedge Funds” because they are so quick to adapt and fit to survive any economic recession or fraud event.

What we are seeing now is a further evolution of what some hedge fund managers are charging their clients. In the past the 2 and 20 formula was different enough from long only fund fees that investors were eager to become involved.  Now after the recent crisis hedge funds are gaining assets again but many investors are worried about liquidity and poor absolute return scenarios.

Some hedge funds are addressing this through allowing investors to clawback performance fees charged in prior years if performance is not sustained.  In some cases hedge funds, such as Hermes BPK Partners are placing percentages of performance fees that are paid out over 2-3 years if positive performance keeps up.

I see this as a long-term trend and believe that eventually managers will have a percentage of their incentive fees paid out over 5 and 7 years periods of continued positive experience because that is what investors really want and innovation is what hedge funds are all about.

Tags: The Secret of Hedge Funds, Hedge Fund Innovation, Innovation within the hedge fund industry, hedge fund investor claw backs, claw back periods for hedge fund investors, investor claw back clauses

Seminar Networking Event: Hedge Fund Premium and the Hedge Fund Group are offering a seminar networking event for hedge fund managers and CTA funds on September 16th, 2009. The event will run from 5PM - 8PM EST in the Blue Room at the W Hotel in Chicago, IL.

At this networking event Bilal Malik from the Malik Law Group and Richard Wilson from the Hedge Fund Group will be speaking on industry regulations and capital raising best practices. The 2 educational talks will last 20 minutes and will be followed by 2 hours of open networking time where fund managers may meet with others in the industry.

Admission is $25 at the door, or free if you are a registered member of Hedge Fund Premium.com. The W Hotel is located at: 172 West Adam Street Chicago, IL 60603 (Please see the RSVP form below for a local area Google Map of the location).

Pictures: Here are some pictures of where the event will be held:

Tags: Hedge Fund Networking Event in Chicago, Chicago Hedge Fund Event, Hedge Fund Group Networking Events, Hedge Fund Event in Chicago IL, Alternative Investments

In 2007 the Hedge Fund Group started developing a professional training and certification program for professionals who work with hedge funds. This project began after realizing that all other programs were designed for risk or analyst professionals and none of these fit the learning objectives we had sought.

In 2008 we opened the doors to our hedge fund training and certification program for the first time, we had just under 100 participants. In 2009 so far we have had over 385 participants join the Certified Hedge Fund Professional (CHP) Program, and we expect to close down registration to new members as we reach the 400th new member this month.

Many hedge fund managers have heard about our program and even participated in it, but delivering a clear message about our objectives, structure and team to an industry of over 150,000 professionals can be a challenge. Below is a short summary of the CHP Designation, what participants learn, and how it is being improved:

Mission: The mission of the CHP Designation is to grow our globally recognized training and certification program into the trusted #1 source of educational for hedge fund professionals.

Structure: The CHP Program is split into two levels, much like an M.B.A. program. Level 1 of the CHP program lets you learn about hedge fund fundamentals and basics while Level 2 allows you to specialize within one area of their choice, including Portfolio Analytics, Marketing & Sales or Due Diligence.

Delivery: Participants complete the program by reading the required books, watching our premium video content available through HedgeFundPremium.com (free to CHP members), and using our CHP Study Guide. Participants may also contact our team for career advice, resume editing or networking advice.

Limitations: The CHP Program does not substitute for any licensing or legal registration requirements. The program is limited to an exclusive set of 200 professionals during each of the two sessions which are held each year.

We have spent over 2,000 hours working on this program, improving it, incorporating feedback and adding video content. If you have any feedback as a potential, current or past participant please email us directly at Team@HedgeFundCertification.com.

To learn more please see http://HedgeFundCertification.com

This is a recent update on the some of the new positions taken by the Berkshire Hathaway Inc. Buffett has increased his stake in Health care and pharma sector at the same time reduced exposure by selling some of his holdings in the energy sector.

Billionaire investor Warren Buffett’s Berkshire Hathaway Inc. took a stake in Becton Dickinson & Co., the seller of syringes and laboratory equipment, in the second quarter as shares gained.

Buffett, who is Berkshire’s chairman and chief executive officer, last week disclosed the sale of some of Berkshire’s ConocoPhillips shares in the quarter, and said the firm had divested an undisclosed number since June 30. Berkshire said today that the size of the stake had fallen 9.5 percent in the quarter. Buffett’s firm remains the oil producer’s second- largest shareholder, according to Bloomberg data.

Berkshire had also previously disclosed the sale of its stake in Constellation Energy Group Inc. Berkshire’s MidAmerican Energy Holdings Co. acquired the shares last year as part of a termination package when Constellation broke an agreement to sell itself to Buffett’s firm for $4.7 billion.

To read more click here.To read more about the tracker profile of Berkshire Hathaway Inc please click here

The markets are in recovering mode and here is the statistics about how the various hedge fund investment strategies have performed in the last few months. The recent galloping in the equity markets and better corporate earnings has certainly had positive impact on the hedge funds performance.

Long-only hedge fund strategies posted the best returns of the asset class in July as global stock markets continued their upward trend, according to data in a report published by Lipper Global on Tuesday. As the industry looks to repair itself following last year’s heavy losses and record redemptions, these new figures will give more ammunition to market watchers who claim that the industry is on the road to recovery.

The data from the Thomson Reuters company showed that long-only hedge funds posting a 4.75 percent return for the month, building on gains of 14.34 percent for the year-to-date.

According to the recent reports released ahead of Lipper’s monthly Hedge Fund Insight Report, which is due at the end of August, showed that all hedge fund strategies posted a positive performance last month, with long/short equity and multi strategies both giving returns of 0.81 percent. Short bias strategies made a 0.40 percent return, boosted by profitable short sale strategies in the first half of the month, Lipper data showed.

The market is already looking for the next macro catalyst to drive market direction; there are a still a number of risks of market correction. The other hedge fund strategies which performed well were, options arbitrage performed strongly in July, with returns of 0.88 percent. Event-driven was the worst-performer, posting a 0.19 percent return.

The recent surge in the stock markets has been because of the of ongoing positive sentiments in the global markets. The comments from Nobel laureate Paul Krugman and other experts saying that markets have touched the bottom and it cannot go down further triggered the markets. More importantly Hedge funds have started to take positions in stocks which they see would generate value in next few years.

Paulson’s new positions

The stocks in U.S gained for a second day after investor John Paulson’s hedge fund bought stakes in banks and Wal-Mart Stores Inc. reported better-than-estimated earnings, overshadowing an unexpected slump in retail sales. Bank of America Corp. and Regions Financial Corp. rallied after Paulson’s firm said it purchased stakes. Wal-Mart , the largest retailer, added 2.7 percent. Alcoa Inc., the largest U.S. aluminum producer, climbed as metals rose. The market’s gain was limited by reports showing sales at retailers dropped for the first time in three months and jobless claims topped forecasts, while analyst downgrades weighed on homebuilders.

Bank of America surged 6.7 percent to $17, the biggest advance in the Dow. Paulson’s hedge fund bought 168 million shares of the company in the second quarter, a regulatory filing showed, becoming the lender’s fourth-largest shareholder.

Regions Financial Corp. rallied 7.9 percent to $5.20 after Paulson bought 35 million shares, becoming the second-largest stakeholder in Alabama’s biggest bank. Financial shares rallied 1.3 percent as a group.

Paulson’s interest in banks comes after his Credit Opportunities Fund soared almost six fold in 2007 on bets that subprime mortgages would plummet. Last year, his flagship fund returned 37 percent, compared with a loss of 19 percent for hedge funds on average.

Click here to read more

The commodities market are all set to take the center stage with government pumping stimulus packages across the globe it seems demand for it may rise because of the multiplier’s effect. This is an article about how commodities are going to perform and below mentioned are some views of the experts

Commodities from oil to copper are poised to climb as government spending worldwide spurs a recovery in demand and companies curtail investment in mines and rigs, said Deutsche Bank AG’s Simon Grenfell.

“We’re building up to have a really strong price move” over the next two years, Grenfell, head of Asian commodities for Germany’s biggest lender, said in an interview yesterday in Singapore. The risk of a “super-spike” has increased, he said, expressing his own opinion.

Commodities jumped 15 percent this year after slumping 36 percent in 2008, their biggest decline in half a century based on the Reuters/Jefferies CRB Index, because of the global recession. This year, gasoline and copper doubled on signs the worst is past for the economy and as China increased inventories of crude oil and industrial metals.

The world economy will grow 2.5 percent in 2010, more than the 1.9 percent forecast in April, after shrinking 1.4 percent this year, according to the International Monetary Fund. China expanded 7.9 percent in the second quarter, the first time growth had accelerated in more than two years.

Please click here to learn more.

We have scheduled 4 networking events for this fall and winter, these are events being put on by the Hedge Fund Group, and they are open to everyone who is a member of Hedge Fund Premium which opens for registration on August 10th, 2009.

At each networking event there will be 20-40 minutes of educational speeches on capital raising and hedge fund operations and then drinks and appetizers for a few hours worth of networking with local professionals. In the past we have had at least 100 participants at each of these events.

Networking Events Schedule:

• Chicago: 9.3.09
• Boston: 10.29.09
• New York: 11.2.09
• Dallas: 12.3.09

For locations of each event please see the Networking Events area within Hedge Fund Premium.

Hedge Fund Premium is an exclusive version of the Hedge Fund Group providing valuable tools related to hedge funds. Our mission is to provide premium networking events, videos and resources within a constantly updated platform which allows us to provides consistent value to our members.m Registration for Hedge Fund Premium opens on August 10th, 2009. Learn more at www.HedgeFundPremium.com.

Tags: hedge fund networking events, hedge fund association, hedge fund premium, hedge funds, hedge fund, alternative investment association, hedge fund conference, conferences

Institutional investors with more than $200 billion plus assets have invested in hedge funds and are using Risk Metrics’ to monitor the risks associated with their investments. These investors, including pension funds, sovereign wealth funds and fund of hedge funds, account for almost 20% of assets under management in the hedge fund industry.

These buy side investors can use Hedge platform community to access tailor made risk reports from Risk Metrics and aggregate position-based risk information across their hedge fund portfolios. Moreover, the hedge funds are invited to provide this information to Risk Metrics free of charge.

Brian Schmid, head of Risk Metrics Group’s alternative investments business strategy, told Hedge Funds Review over 1,000 hedge funds were eligible to provide information to HPC. He said more than 200 hedge funds representing over $350 billion in assets under management have already signed agreements to participate in HPC.

Risk transparency and reporting are rising up the agenda for institutional investors. According to a survey by EDHEC Risk and Asset Management Research Centre, 92% of investors believe the quality of hedge fund reporting is an important signal of a fund’s overall quality and pivotal for decisions about hedge fund investment.

Institutional investors can use HPC to generate a number of risk reports on their hedge fund investments, including Value at Risk and stress tests. Risk Metrics is working on including liquidity risk reports within the service. In the future, the company said counterparty risk reports could also be added to HPC.

These are four common things that an individual may focus in order to be successful in the investment industry

·      Lack of a trading plan

One should have proper plan in place before stepping into the investment world. Analyze their risk and return profile before making a decision. Moreover, they should also have a clear idea of when they should enter into the markets and exit.

· T Too much leverage

Try to be risk averse and don’t invite yourself into trouble by taking huge leverage positions. It’s was because of extensive leverage LTCM failed to cover up its positions.

· F  Failure to control risk

Have a sound internal auditing and risk management team in place. Constantly focusing on the kind of exposure which a fund or their investment may be exposed too and try back you investments by investing in alternative investment avenues which would have low correlation with the traditional investments

· L  Lack of discipline

Abide and comply by the standards set. Try to focus on the fundamental aspects of the investment you make rather than making a decision based on the insider information ( noise trading).Understanding the know-hows of investments and trading according would eventually end up fruitful.

Hegde Me by Claude Schwab is a brilliant book which provides the reader insights about the hedge fund career in U.S.

Hedge Funds

In the chapter Hedge funds the author explains the following

• Defines what a hedge fund does
• Explains the various investment strategies followed by fund houses.
• Categories the top 25 hedge funds based on the AUM and top 10 hedge fund cities based the equity assets managed
• Online resources where one can find the recent updates happening in hedge fund industry

Interviews

The author discusses the qualities which an individual should possess for clearing the first round of interviews. Moreover he explains the reader what kind of positions are available for analysts within the industry and the expertise which the employer would seek.

In addition to that one can also get a glimpse of the questions which one would face in the interview. Do’s and Don’ts which one should follow during an interview. He also pin points the qualities which a fund manager can expect for a specific investment strategy from the candidate.

Recruiters

In this chapter one can find a bunch of recruiters list which would absolutely useful for candidates who are seeking jobs within the industry.

Resumes

The author presents the reader with copies of resumes starting from a fresher to an experienced candidate. Each resume shown is prepared for a particular kind of investment strategy. So the one can get a clear idea of how one’s resume should look like when applying for those kind of positions.

Careers

The following are discussed

• How stable the career would be and what would be the underlying factors which determine your career
• Growth opportunities within the industry or what would be the career path of an individual

Compensation Structure

Following are the factors which would determine one’s compensation package:

• Years of experience
• Performance of the fund
• Individual’s performance
• Assets under management

This is the  update about the Berkshire Hathaway Inc’s  performance for this recent quarter results released and they have earned a profit of $2 Billion with the investments in Goldman Sachs alone.

Warren Buffett’s option to buy shares of Goldman Sachs Group Inc., part of an agreement reached at the depths of the credit crisis, has earned a profit on paper of about $2 billion, a return of more than 40 percent.

Goldman Sachs today passed $162 in New York trading for the first time since rival Lehman Brothers Holdings Inc. collapsed in September. Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. has warrants to buy $5 billion of Goldman common stock for $115 a share any time in the next four years.

“It must feel good to be Warren Buffett,” said Gerald Martin, a finance professor at American University’s Kogod School of Business in Washington, who has studied the billionaire’s investing history. “That number just flies in the face of people who like to say he’s lost a step.”

The difference between the strike price and the share value translates into a $2.11 billion paper profit for Berkshire. The U.S. government got a 23 percent annualized return for its investment in the firm after an agreement yesterday by the bank to repay $1.1 billion to settle warrants.

Goldman Sachs turned to Buffett in September, agreeing to sell $5 billion in preferred shares paying 10 percent interest, after Lehman’s bankruptcy and the emergency takeover of Merrill Lynch & Co. by Bank of America Corp. Amid the crisis, Goldman earned an explicit endorsement from Buffett, the so-called Oracle of Omaha who is celebrated for his investing savvy.

Click here to read more.To view the SEC 13F analysis , tracker tool analysis and other updates click here

The SFA Meeting was an opportunity for administrators to share technical, financial and regulatory information pertaining to the management of State Petroleum Cleanup Trust Funds and various issues associated with underground storage tank systems.

The 17th Annual SFA Meeting marked the end of an era. Beginning in the spring of 2009, the SFA Meeting will be integrated into the National Tanks Conference. This change is being made in an effort to organize a conference that more comprehensively addresses the multi-faceted issues related to managing a State Underground Storage Tank program.

To learn more about the meetings click here

This is an article about the association of hedge funds and it discusses about what  benefits which one would enjoy by joining the association and other benefits which one can access are press releases,newsletters, hegde fund related articles and recent headlines about the hedge funds.

The Hedge Fund Group (HFG) is a network of over 25,000 hedge fund industry professionals who actively network, partner, and refer resources and leads to each other. Everyone who joins this group does so with the intention and in the spirit of freely helping others with no expectation of anything in return.

The Hedge Fund Group (HFG) is the fastest growing hedge fund organization in the industry with members from over 60 countries and every major hedge fund city hub.They also run a certification program which helps people to know about the know hows of the hedge industry.

CHA Designation is a professional certification program catering to professionals in the hedge fund industry. The CHA Designation is the only certification program designed exclusively for those professionals who work in the hedge fund industry or for wealth management and service providers who would like to better understand and serve hedge funds as clients

For more information about the hedge fund association click here

Our team has come up with an article on the fund administration services provided by JP Morgan.It provides a wide range of services for fund administration such as fund accounting, financial reporting, transfer agency, patnership allocations and custody services to over $10bn of assets in portfolio managed by financial risk management.

JPMorgan Hedge Fund Services will provide fund accounting, financial reporting, transfer agency, partnership allocations and custody services to over $10bn of assets in portfolios managed by FRM.

Part of JPMorgan Hedge Fund Services’ growth strategy is to build on its success providing custody and related services to hedge funds and traditional asset management firms by increasing its focus on serving the funds of hedge funds industry. As part of this commitment, JPMorgan has developed compatible and highly automated administrative and custodial products specifically to serve funds of hedge funds, which are being used by FRM, a leading global player in the market.

Robert Caporale, global head of JPMorgan Hedge Fund Services, said: “FRM’s history of leadership, investment performance and innovation in the fund of hedge funds market makes them an ideal partner for us. We are delighted that JPMorgan has been chosen to provide this service.”

JPMorgan Hedge Fund Services (HFS) offers hedge funds and funds of hedge funds independent fund administration, custody and middle- and back-office services, as well as full outsourcing for day-to-day fund administration. JPMorgan HFS provides services globally to more than 240 funds representing approximately $75 billion in assets under management. Services are provided globally via a network of specialized offices in Bermuda, Boston, Dublin, Greenwich, Hong Kong, London and Luxembourg.

To read more about JP Morgan Fund Administration please click here

Our team has come up with an article about Augentius Fund Administration and one can learn about what Augentius is all about, what kind of services they offer, their client base and their presence around the globe.They offer wide range of services to the clients and bankers which makes it’s presence felt all around the globe.

Augentius Fund Administration LLP provides fund administration services to private equity and property fund sectors. Its services for private equity and property funds include assistance on fund establishment and comment on legal documentation; customer and anti-money-laundering checks; corporate governance; generation and distribution of various call letters, and monitoring for receipt of cash; payment of various expenses; maintenance of various accounting/financial records; collection and reporting of data from portfolio companies; and production of quarterly reports for LPs.

The company’s services also include the preparation of annual accounts, management of audit process, and production of annual financial statements, as well as production of data for tax reporting. In addition, its services for GPs include assistance in selection of bankers, and payroll and service providers; reconciliation of bank accounts; regular financial reporting; participation in budgetary and cash-flow process; preparation of VAT returns; and operation of client money accounts. The company has clients in the Middle East, the Russian Federation, Hong Kong, and the Nordic region.

Augentius Fund Administration LLP was formerly known as Ansbacher Fund Services. The company was founded in 2006 and is based in London, the United Kingdom with additional offices in London and Guernsey.

To know more about Augentius Fund Administration please click here

If you are looking to learn more about Private Equity as an investment, career or for prospects for your small business please refer to PrivateEquityBlogger.com. This is a blog ran by the H Media Group and it contains over 500 unique articles, videos, interviews, book reviews and Q & A pieces on private equity. Here are links to their top 50 resources:

1. Private Equity Jobs and Careers
2. Private Equity Videos
3. Alternative Investment Jobs
4. Private Equity Tracker Tool
5. Service Providers
   
6. Private Equity Book
7. Private Equity Associate
8. Private Equity Industry
9. Private Equity Directory Listings
10. Hedge Fund List
11. Private Equity and Hedge Funds
12. Private Equity MBA
13. Private Equity Real Estate List
14. Private Equity Conference
15. Private Equity Real Estate
16. Private Equity Forum
17. Access PEBlogger.com Archives
18. Resume writing
19. Private equity partner
20. Venture Capital Associate
21. Private Equity Positions
22. Private Equity Job Database
23. 3i Group PLC
24. Admiral Capital Group
25. Apollo Management
26. AXA Private Equity
27. Baring Private Equity
28. The Carlyle Group
29. Goldman Sachs Capital Partners
30. Leonard Green & Partners
31. KKR Private Equity
32. The Future of Venture Capital
33. Private Equity in Africa
34. Angel Investing Video Part 1
35. Angel Investing Video Part 2
36. Angel Investing Video Part 3
37. Private Equity in China
38. Venture Capital Bloggers Video
39. Raising Venture Capital Video
40. Private Equity Boom
41. Private Equity Real Estate Video
42. Middle East World Economic Forum Discussing Private Equity 2007
43. General Partner Fees
44. Independent Directors for Private Equity Funds
45. Private Equity in Brazil
46. Private Equity Activity 2009
47. FDIC Private Equity
48. Mechanical Trading Systems by Richard Weissman
49. Sri Lanka Investments
50. Michael Jackson Private Equity

While researching about the fund adminstration training programs here is what we found about the International Faculty of Finance has to offer.It has various financial traing programs offered during the year.

IFF is the world’s leading provider of business focused energy and financial training programmes. Our energy and financial training programmes and in-company performance improvement are designed by energy and finance specialists for energy and finance professionals and are created specifically to help you succeed in today’s competitive markets.

This is what IFF has in store for fund management enthusiasts

Richard Weissman introduces the reader with a process-driven approach to trading. In addition to the development of mechanical trading systems, the significance of trader psychology is discussed throughout the book. Mr. Weissman calls it the framework of “reprogramming the trader.” He provides a clear understanding behind the conceptual development of mechanical trading systems as well as demonstrates possible mistakes by system developers and ways to avoid them. His main lesson for the reader is that flexibility enables traders to succeed in all kinds of trading environments.

Dispelling Myths and Defining terms

In this chapter the author emphasizes more on mathematical technical analysis than classical technical analysis. He also explains why mathematical way of analyzing is an ideal component for mechanical trading systems than fundamental or interpretive analysis and thus claims this as an apt method for generating profits

Mathematical Technical Analysis

Introduces the two basic flavors of mathematical technical indicators which are mean aversion and moving averages. The chapter also explains how these indicators can be transformed into comprehensive trading systems through the inclusion of various risk quantification parameters such as volatility bands and percentage value of trading instrument.

Trend Following Systems

By going through this chapter one can figure out how even a simplistic of the systems can produce a respectable rate of return while enduring relatively moderate worst peak-to -valley drawdowns in equity. The reader can also understand why certain asset classes tend to trend more than others

Mean Aversion Systems

Examines why certain asset classes display a greater propensity toward mean aversion than others and includes examples of no directionally biased mean aversion systems and mean aversion systems that employ a trend following filter.

Short term Systems

One can understand what short term volatity really means by going through the concepts of swing and day trading. It helps the reader to explore what unique personality traits are needed to overcome the same.

Knowing Oneself

Provides the reader a comprehensive review of major categories of trader types (trend following, mean aversion) as well as the typical time frames (long term, day trading, swing) in which they operate. Helps the reader to identify the flaws in trader psychology. Once the reader has identified their innate trading personality, a step by step transformational process via utilization of different types of mechanical trading system and psychological tools is outlined

System Development and Analysis

This chapter examines some of the benefits and limitations of mechanical trading system, optimization studies, development of trading system philosophy statements and the pros and cons of various methodologies for measuring trading system performance. It also looks at the downside to system development and how to resolve these problems: data curve fitting, parameter curve fitting, data integrity issues and slippage.

Price Risk Management

Discusses the various price risk management methods such as stop loss and volumetric price risk management .Coverage of volumetric price risk includes both Martingale and anti-Martingale position sizing techniques such as frictional position sizing and value at risk. Other techniques covered include the study of worst-back tested peak-to-valley equity draw downs, static volumetric tests, stress testing and system losses as a percentage of total equity under management. Finally the chapter examines the psychological aspects of price risk management and shows how utilization of mechanical trading systems can aid in fostering confidence during drawdowns.

Improving Rate of Return

In this chapter the author discusses how can one improve the overall rate of return by using these three methods

· Addition of various low or negatively correlated assets such as foreign exchange, crude oil and futures

· The staggering of parameter set trigger levels for the same system

· Combination of mean aversion and trend following systems within a single trading account

Discretion and System Trading

This chapter examines how a trader’s knowledge and experience can be utilized within the framework of mechanical trading system

Psychology of Mechanical Trading

Here the author relates the link between mechanical trading systems and transformational psychology, explaining in detail issues such as self worth, single-mindedness, discipline ,nonattachment to result’s of one’s actions and realizing of old emotional patterns.

Lattice work is the blinder presented by one of the Wall Street greats Robert Hagstrom, by going through this book one can clearly understand how a complex financial markets work and can explore new ways of investing. Hagstrom takes the reader to a pleasant ride where he introduces basic concepts from physics, biology, social science, literature, psychology, philosophy etc. and explains how one can make effective decisions by broadening their horizons.

LATTICE WORK OF MENTAL MODELS

This hierarchy may look good but it’s upto the individual to find a right correlation exists that between them.He means to say that an individual may posess tons of cognizance but at the end of the day if he cannot find the right connectivity or match that exixts between whatever he read and whatever he may be doing then he should be ready to face the music.

PHYSICS

In this chapter the author has a traditional view about the financial markets and introduces the concept of equilibrium to justify his stands.

BIOLOGY

It’s all about evolution which is happening consistently thus presenting the undying fact that complex adaptive system outweighs the concept of equilibrium.

SOCIAL SCIENCE

One can understand about the behavior which an investor exhibits in a group and what adverse effects that it would bring in to an economy because of collectivism.

PSYCHOLOGY

It is the sentiments that take the center stage where the author describes the global financial system to a network of nodes connected together and states that a failure in a node would cause dynamic changes to the entire system.

LITERATURE & PHILOSOPHY

Both these chapters share some common views, Hagstrom emphasizes the important aspect of thinking in order to gain worldly wisdom and lets the reader to know that apart from the learning’s imparted through curriculum it is increasingly important to develop profound diversified basket of knowledge.

DECISION MAKING

For an individual to come up with an effective decision in this rapidly changing ambience he should possess eclectic mix of knowledge so that the model he builds is robust and reliable. We can see from the graph that decision making overlays all the other concepts discussed in this book.

I have also shown  in nutshell what this book would be all about.

This book “Core-Satellite Portfolio Management “by J.Clay Singleton discusses about the asset allocation. One can understand that there two phases in portfolio management that is the core (passively managed) and the satellite (actively managed) portions. In addition to that the components of core-satellite ring are introduced to the reader and how can one coordinate these components to balance one’s portfolio. He makes the reader understand how important is to rebalance a portfolio and allocate risks accordingly so that they are not missing the bus.

A Core Satellite Approach to Portfolio Management

In this chapter the author drives home the vital concept of portfolio management i.e. asset allocation, by explaining how the components in the core as well as in satellite should complement each other in order to generate magic Greek letter –Alpha.

Quantitative Finance

The author throws some light on some of the basic quantitative concepts which would help the reader to understand the concept of correlation and also how diversification would be phenomenal in reducing the portfolio’s risk. Moreover the concepts like efficient frontier are reviewed and explains those underlying assumptions are not perfect reflections of reality. Finally the author stresses on the importance of risk measures and risk monitoring.

Core Equity

In this chapter James A.Pupillo explains the following:

• How to construct the core portion of a core-satellite portfolio for equity holdings
• What factors which one should consider in choosing indices
• Summarizes the key features of popular equity indices from which benchmarks can be customized on weighted basis
• How risk budget is used as a tool for allocating risk between core and satellite positions

Core Fixed –Income Management

In this chapter Kenneth E.Volpert explains the following:

• How one can pick higher quality liquid sectors in the core at low costs
• Explains the different kinds of fixed income risks and suggests tracking error associated with each in various strategies

Satellite Bonds- High Yield and Distressed Debt

By going through this chapter the reader will be exposed to market history and historical correlations of all kind of debt instruments like high yield debt, junk bonds, private placements, collateralized debt obligations (CDO’s) and distressed securities. In addition to that Clifford A. Sheets explains the reader what special skills are required for one to manage these assets and the fee structure expected to manage the same.

Management of currency fluctuations associated with International Investments

The author (Ranga Nathan) deals which the currency fluctuation exposures, how can one handle and manage the same by using currency overlay management techniques. It also focuses on the kind of arithmetic which one should understand about how foreign currency exposure arises and how it’s influenced by economic factors.

Treasury Inflation-Protected Securities

The author (Peng Chen) justifies to the reader why TIPS should be included in satellite portfolio compared to other financial asset classes. It helps us to understand how it works, their return patterns, relationships with those of other asset classes and reviews their history. It also explains how the difference between nominal bond yields and TIPS yields provides a good indicator of market’s aggregate forecast for future return.

Hard Assets

The authors (Pen Cheng, Jeffrey M.Antonacci and Joseph P.Pinsky) focus on hard assets and soft assets which are typically not traded in the exchanges and frequently have a lower liquidity. Moreover direct energy asset classes (oil and gas) are discussed thereby one can understand how this would be beneficial to enhance the risk/return profile.

Finding value in Small Stocks

In this chapter Gary G. Schlarbaum and Bradley S. Daniels give the reader insights about the tools and valuation methodologies required to manage the small capitalization stocks in satellite portfolio.

Risk Measurements of Investment in the satellite Ring of a Core-Satellite Portfolio

In this chapter Hilary Till discusses the following

• Helps the reader to understand the risk return trade-offs that may be present in the satellite ring
• Why sharp ratio has become the main performance evaluation metric for investments and it’s shortcomings
• Several alternative metrics needed for performance evaluation and also helps one to understand the source of returns for satellite investment strategy rather than relying on the performance numbers

Identifying and Adopting Best Practices for Institutional Investors

Here Samuel W.Halpern and Andrew Irving explain some of the best practices like legal, professional, regulatory, operational overview which is followed in the industry and one has abide to all these regulations to be best in the business.

Multi-Prime Service Platform Predicted

SAN FRANCISCO, June 15 /PRNewswire/ — The financial crisis of 2008 has upset the relatively stable equilibrium previously maintained between hedge fund managers and their traditional service providers, according to a white paper released today by Nirvana Solutions, provider of Nirvana (TM), a real-time portfolio management system for multi-prime hedge funds, prime brokers, and fund administrators.

The white paper, entitled “The New Model of Prime Brokerage - The Multi-Prime Service Platform,” documents the dynamic changes to the hedge fund industry and its service providers in the aftermath of the 2008 market crash. Peter Curley, managing partner at Nirvana Solutions, examines how the roles of traditional service providers have changed, leading to the emergence of a new service model providing the full range of hedge fund services through a single, real-time multi-prime infrastructure built on a common, outsourced technology platform.

“The profound impact the crisis has had on hedge funds has already been well-documented,” Curley said. “Another significant outcome of the crisis, we feel, will be the aggregation and convergence of services provided to hedge funds through a single service provider. This new service provider cannot be adequately described as a mini-prime or a fund administrator but rather a hybrid of both, a model we are calling The Multi-Prime Service Platform.”

New requirements, such as multi-prime technology that can provide real-time views of critical data such as exposures and risk, and impending hedge fund regulation, are now converging to significantly increase the barriers to entry for new hedge fund managers. The operational efficiencies achieved through The Multi-Prime Service Platform promises to provide the critical sub-$500 million segment of the hedge fund industry-where the tension between the new requirements and the hedge funds’ ability to pay is at its most intense-a cost effective, fully integrated solution providing real-time transparency in a multi-prime environment.

To download the white paper please visit: www.nirvanasolutions.com.

About Nirvana Solutions (www.nirvanasolutions.com):

Founded in 2006, Nirvana Solutions is a San Francisco based software company that provides real-time portfolio management systems to multi-prime hedge funds, prime brokers, and fund administrators. Nirvana(TM) is the hedge fund industry’s first portfolio management system built around the Financial Information Exchange (FIX) protocol. The ability to dynamically accept FIX messages, combined with the aggregation of multi-prime data, ensures true real-time views of critical measures such as P&L and Risk. Nirvana’s ability to offer real-time transparency is complemented by a full suite of on-demand and historical reporting. The Nirvana solution is made available in an easy-to-deploy Software as a Service (SaaS) model and can be implemented in a modular or complete fashion.

While we were looking into fund administartors who are providing outsourcing solutions we came across BGT Consulting LLC Fund administration who provide solutions to alternative investment vehicles.

BGT Fund Administration provides outsourcing solutions to alternative investment vehicles, including:

• Hedge Funds (Onshore, Offshore, Master/Feeder Structures)
• Fund of Funds
• Private Equity Funds
• Investment Advisers and Management Companies

FUND ADMINISTRATION SERVICES

Services provided by BGT Fund Administration to our Hedge Fund clients include:

• Fund Accounting/NAV Calculation - calculation of Fund’s Net Asset Value (NAV) and preparation of Fund’s monthly Balance Sheet, Income Statement and Statement of Changes in Investors’ Equity.  At the end of each accounting period we collect the information from your prime brokers and reconcile all the reports, making adjustments for the accruals in accordance with US GAAP. We then calculate the management fees, loss carry-forwards and performance allocation in accordance with the Fund’s Limited Partnership Agreement and other governing documents and proceed to the next step - Partner Allocations.
• Partner Allocations - allocation of Fund’s income to investors, calculations of investor’s capital balances after management fees and performance allocation, and preparation of monthly Statements of Changes in Partner’s Equity aka Partners’ Letters.
• Year End Services - preparation of complete set of financial statements including Condensed Schedule of Investments and Statement of Cash Flows, footnotes and Financial Highlights for Fund’s auditors. We work directly with the Fund’s auditors and tax preparers to assure timely delivery of the year end audit and K-1s.
• Web Based Reporting - on-line access to monthly or quarterly reports through our secure website.  We may also post Fund’s audited financial statements, tax returns, PPM and other related files on the website to give you one central location to keep Fund’s financial information.

Many times we work with our clients from the inception, helping them with the initial set up, answering any accounting related questions, reviewing permanent documents and working with the legal council and prime brokers.  We are always available to our clients and we encourage our clients to ask us questions and use us as a valuable resource.

CONSULTING SERVICES

BGT Fund Administration also provides accounting consulting services to:

Management Companies and Investment Advisers of Hedge Funds

Family Offices

High Net Worth Individuals

Closely Held Businesses

We can assist you on either temporary or on-going basis. Due to the size of our firm, our clients receive incomparable, personalized, quality service.

We offer wide variety of consulting services, including:

• Help with various accounting and performance projects
• Set up of accounting system within the company
• “Clean up” of your internal books for audit and/or tax work
• Special projects

Click here to learn more about their offerings