The Hype and Myth Surrounding Private Equity & Hedge Funds

This course explains the futility facing the institutional investor and wealthy individual considering a major commitment to (i) leveraged buyout funs; (ii) venture capital funds; or (iii) hedge funds. Despite the marketing hype and media reporting to the contrary, these funds do not beat the returns of a passive S&P 500 index portfolio. Nevertheless, in defiance of financial logic, such funds attract huge numbers of new clients.

No sessions currently available. Contact client services to get the next available date.
CPE CREDITS
7.0
High net-worth managers, alternative investment and private equity portfolio managers, consultants and gatekeepers to asset allocation managers, private client financial service providers, individual investors and others directly or indirectly involved in buying into leveraged buyout, venture capital and hedge funds.
No advance preparation required.
Students will be able to:
  • Separate fact from fiction with regard to leveraged buyout, venture capital and hedge fund risks and returns
  • Discuss the funds' lack of performance objectively
  • Explain to others why the marketing and media hype seduces otherwise knowledgeable investors
None
Introduction
  • The alternative investment craze
  • What's going on in this sector

Major Alternative Investments

  • LBO funds
  • VC funds
  • Hedge funds
  • Objectives, structures and operations

Historical Performance of These Funds

  • Review of recent objective studies that show poor relative performance
  • Explanations for the underperformance
  • Tax issues for non-tax-exempt investors that hurt performance

The Essential Paradox

  • Why do supposedly sophisticated investors keep chasing phantom returns?
  • A critical analysis of their explanations for doing so

How to React to Proposals from Fund Managers

  • How they hide fees, returns and actual portfolio values
  • Consider elements of efficient market theory in evaluating funds
  • Negotiation tactics if you still want to inves

Clients who register for this course will receive a complimentary 4-month subscription to FT.com. The Financial Times is the world's most respected financial newspaper, providing a broad assessment on finance, business and the industrial sector. The move to the electronic version follows an ongoing review of our environmental responsibilities as a global business and as part of the Pearson group. FT.com also has features that are not available in hard copy, such as: Special Reports, Alphaville, editor blogs, education sections and much more! Subscriptions will start within 6-8 weeks of the start of class and are limited to one subscription per client. (Please note: as of May 1, 2011, the electronic subscription replaces the hard-copy 3-month Financial Times subscription.)

Lunch is included for all students taking day classes.