Glossary

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Hedge Funds

Hedge Funds

The term hedge fund covers a multitude of different investment strategies. They tend to be structured as limited liability partnerships or companies. A few will allow an investor to enter or exit on a daily basis but most commonly this will be monthly or quarterly, some are even longer. They invest in all sorts of assets. They will often include an element of hedging within the investment strategy.

Tail Hedging or Tail Hedge

Tail Hedging Funds are designed to benefit when extreme events occur. So-called Black Swan events (named after Australia’s Black Swans, an animal so alien to European minds that its existence couldn’t be foretold) could impact the value of all assets (when assets fall or rise in tandem they are said to be positively correlated). Tail […]

Equity hedge

Equity hedge funds can be long/short funds that have a portfolio where the long positions are more or less offset by short positions, or equity long bias, funds that are almost always net long. These funds may seek to sell an investment they think is going to fall in value and buy a corresponding investment that […]

Protection strategies

Some hedge fund strategies are designed to make money when other assets are falling in value. Collectively these can be referred to as protection strategies. The simplest of these is a net short equity or credit fund but other types exit including Negative Correlation funds that seek out investments that benefit when certain asset prices […]

Event driven

Event driven, in the context of hedge fund strategies, refers to a strategy that seeks to take advantage of an event such as a take-over or a bankruptcy. It assumes that investors over or under react to published news rather than seeking to predict what the news will be.

EPRA NAV

The EPRA NAV is a net asset value per share calculated in accordance with EPRA’s methodology i.e. net assets on the balance sheet excluding the effects of hedges, debt adjustments associated with the hedges and deferred taxation. It also adjusts the share in issue for the potential dilution of shares issuable under employee share schemes Click here to subscribe for […]