Intermediate
Gross exposure, net exposure and leverage
Gross and net exposure answer different questions. Both are useful, and neither is a complete measure of potential loss.
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Hedge Funds Investment Guide
Understand hedge fund structures, investigate strategies and fees, and build a disciplined manager research process. Follow eight stages from investor access and portfolio mechanics to due diligence and ongoing review.
Start with What a hedge fund is and what it is not, then follow the next lesson links. Explore 32 lessons with worked examples, exercises and further reading.
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Risk and Portfolio Mechanics · All lessons
Risk and Portfolio Mechanics
Measure exposure, financing, liquidity and losses across different scenarios.
Intermediate
Financing, margin calls and counterparty risk
Financing terms can change before an investment thesis resolves. A fund must survive collateral demands and counterparty disruption as well as price movements.
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Intermediate
Liquidity mismatch and crowded exits
Liquidity risk appears when cash obligations arrive faster than assets can be sold at reasonable prices. Crowded trades can make that imbalance worse.
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Intermediate
Stress tests, drawdowns and tail risk
A stress test asks how a portfolio might behave under adverse assumptions. A drawdown records an actual decline from a prior peak. Neither predicts the worst...
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