The increasing interest in Hedgefonds in Germany started already in 2004 by the introduction of the investment modernisation law. Indeed, Hedgefonds also bring a certain risk with themselves, because they show a "black box" for most investors – finally, can be hardly understood which strategy is exactly pursued and how the yields are achieved. Even the name in itself already contains a deception, because investors a product for the security (in English: Hedge) from already existing securities could suppose. However, really Hedgefonds offer no additional security but to conclude only quite basically the possibility around straight new risk yield positions and to extend the port folio.
Hedgefonds are counted to the group of the alternative investments with which beside traditional Assetklassen – like money market, shares and loans – also investment strategies (for example, "Buy And lovely“) and other Assetklassen are used like precious metals as well as special investment strategies as for example empty sales. Indeed, Hedgefonds are not fixed basically to a certain Assetklasse or a certain strategy and offer accordingly a high flexibility which shows the important sign of a Hedgefonds. Besides, other important signs are special profit profiles, a reimbursement oriented to result of the management as well as a low regulation.
The different Hedgefonds strategies
Basically it can be held on that Hedgefonds always pursue own, individual strategy and by her numerous creation possibilities many different investment strategies have also developed. On grounds of this high variety it is also to be compared rather hard the different Hedgefonds with each other, indeed, there are some attempts absolutely, they try to split up the Hedgefonds after her investment strategy. Besides, this categorisation is fed above all by data which are made accessible by special suppliers. However, these Hedgefonds-data suppliers sort her data banks according to certain strategy groups before, so that every Hedgefonds which would like to report his own growth must assign itself first to one of the strategy groups. Indeed, the data suppliers differ every now and then strongly of each other and during does not unite yet ten different strategy groups tapes, offer other suppliers of data banks nearly 40 of the Hedgefonds strategies. Indeed, also do not agree economic-scientific really how exactly a Hedgefonds can be categorised and which strategies are really suitable as an upper concept. However, basically three upper strategies which split themselves once again in other unterstrategies can be held on:
- Event-done strategies
- Market-neutral strategies
- Opportunistic strategies
The market-neutral strategies
To divide a possibility around Hedgefonds into strategies are the so-called market-neutral strategies which are also known as "Relative Value": With this strategy temporal differences between prices should be used between being similar investment instruments and the market risk should be nearly removed by entering of counter-rotating positions. The market-neutral strategies try to achieve a positive yield without being dependent on the market sphere – her adjustment is focused on absolute yield aims. Indeed, the Volatilität of the yields is always rather low. The most important market-neutral Hedgefonds strategies are known under the name „Fixed Income of arbitrage“, „Convertible of arbitrage“ and „Equity Market of neutral strategy“. Besides, arbitrage is focused the Fixed Income especially on loans, while the Convertible arbitrage lay a main focus on the market of the change loans. The Equity Market neutral strategy, however, completely limits itself to the stock market.
The „Fixed Income of the arbitrage“ which is called in Germany also often „bonds of arbitrage“ identifies subjective false assessments of securities fixed-interest with the help of the analysis of interest structure curves as well as of Volatilitätsverläufen. If these false assessments are found, afterwards it is speculated on the fact that they are removed. With this special strategy a firm main focus of the speculation which can be, for example, the term, kind, credit standing or interest rate with securities fixed-interest is searched. That's why can be subordinated under the upper concept „Fixed Income of arbitrage“ also a huge number by Hedgefonds strategies. In addition count, for example, capital structure arbitrage with the main focus of the term, Credit Spread arbitrage with the main focus of the credit standing, Yield Curve arbitrage with the main focus Interest rate and the Mortgage Backed Securities arbitrage with the main focus of the loan kind.
However, Convertible arbitrage – better than "travelling loan arbitrage" famously – function as follows: Travelling loans are valued and if one can be judged as undervalued, this becomes is bought and there becomes concurrent the matching share empty-sold. Should a course increase of the share occur then, is won with the travelling loan more than with the empty sales of the share is lost. If there is, however, a course decline of the share so it is lost with the travelling loan less than with the empty sales of the respective share is won. All in all, a plus is achieved in the ideal case. With the Equity Market neutral strategy (into German as a „market-neutral share strategy“ addressed) it is aimed at an exploitation of short-term differences between prices in share trade. To be able to identify this really the basic analysis is used on the one hand, however, on the other hand, statistical models are also used. Within this strategy group the Statistical arbitrage and the Basically arbitrage can be distinguished: With the Statistical arbitrage takes over the job of the share choice a computer on which the statistical models were implemented, while at the basic arbitrage the Hedgefonds manager selects the respective shares.
The event-done strategies
An other known Hedgefonds strategy is the so-called event gears strategy: The speculations which are aimed at the entry of certain events during the life cycle of an enterprise – for example the takeover or splitting off of enterprise parts, but also also reorganisations and insolvencies are done with this method. Indeed, it should be pointed out to the fact that the yields of Hedgefonds which help themselves to this strategy volatiler are as the yields of the market-neutral Hedgefonds. Under the upper concept of the event-done strategies are summarised Risk arbitrage as well as Distressed Securities. With the latter form it concerns investments in enterprise which suffer need, while Risk arbitrage deals with a huge number of enterprise events. In addition counts on the one hand primarily the speculations by enterprise takeovers, nevertheless, on the other side many other enterprise events which could contain potential investment possibilities are also examined. Besides, the basis for event-done Hedgefonds strategies lies in the insecurity with regard to the exit of an event – as for example with the attempt of the takeover of an enterprise. The Hedgefonds manager tries to anticipate the exit of the event in the approach and collects for it an extensive knowledge. However, not only right anticipating of the exit is important, also a quick decision must be liked.
With the so-called Distressed Securities – strategy (too in German: Impoverisched enterprises) an investment is effected in an enterprise that is topically in a difficult situation – this can have financial as well as surgical reasons. For it can be used Own as on outside capital title of the enterprise and basically it is speculated on the continuation of the activities of the enterprise. The idea behind the fact is that almost always the announcement of financial or surgical difficulties – as for example forthcoming liquidation proceedings – lead to the fact that the concerning securities become illiquid. This leads again to a high insecurity with the stockholders who would like to sell her shares and are up against a very low buyer's number. Moreover, the downward trend is still strengthened, because many institutional investors must sell – they may not invest in securities with a low rating. If a Hedgefonds manager can forecast in such a case a positive exit and is correct with an analysis, a high profit potential can originate – indeed, the risk of the complete loss also exists if the appraisal should turn out as wrong. Indeed, Hedgefonds which really invest in the Distressed Securities fulfil a very important overall economic function: In many cases they offer the only possibility for impoverisched enterprises and only by the investment itself the continuation of the enterprise activity is only allowed.
With Risk arbitrage splits itself in two other strategies: On the one hand it is aimed at course movements by enterprise takeovers – so-called Merger arbitrage. On the other hand, there are also special speculations on the life cycle of an enterprise – the so-called Other Special Situations speculate on special events. At the Merger arbitrage the course movements are the object of the consideration by enterprise takeovers. It are bought up with this Hedgefonds strategy at the same time shares of the takeover candidate and the shares of the taking over enterprise become empty-sold – one speculates on the fact that the takeover can be really realised. Is speculated by the Hedgefonds manager, however, on the fact that the takeover attempt will fail, it comes for the empty purchase of the takeover candidate and the purchase of shares of the taking over enterprise. This strategy is based on empiric observations and strong course movements can be observed above all by announcements: With takeover plan as well as with the execution or the failure of the takeover the additional announcements which affect directly the course are brought out. Besides, some investors operate before the announcements on the basis of rumours, other, however, invest when the takeover was already announced. However, under the concept "Other Special Situations" the strategies which concentrate upon special events are summarised. For example, the reorganisation of a share index, the announcement of share repurchases or the splitting off of enterprise parts counts to it.
Opportunistic strategies
The third upper category is known under the concept „opportunistic strategies“. This Hedgefonds strategy tries to adapt her security positions to various movements which are explained at international capital markets. The following strategies count to this upper category:
- Long/Short Equity
- Emerging Markets
- Dedicated Short Bias
- Worldwide Macro
The Worldwide Macro manager create her speculations on the base of a so-called top Down beginning and, besides, use worldwide direction changes of prices to some certain Assetklassen. With Long/Short Equity Hedgefonds, however, a Bottom Up beginning which should identify single extremely attractive investments is used. However, the Emerging of market of Hedgefonds invest merely in threshold countries, while the Dedicated Short Bias concentrate upon empty shorts. Basically the opportunistically straightened Hedgefonds strategies differ from the market-neutral and event-done strategies by the fact that they try to profit from special market movements. Besides, the success – or failure – depends above all on the Hedgefonds managers itself: If these in the situation are right the market movements to anticipate, the yield is high accordingly. Finally, small prize movements are not aimed, but basic differences between prices and constant trends are the aim of the investigations and Antizipierungen. These Hedgefonds strategies take deliberately certain systematic risks and thereby own also the highest Volatilität of three strategy groups.
With the Worldwide Macro strategy it is speculated worldwide on strong, basic direction changes of certain Assetklassen – and of course to their prices–. A top Down beginning is pursued: At last there speculate the managers of the Hedgefonds on economic trends and then place not on single titles, but directly on whole investment classes. Then thus, for example, the changes are analysed by economic forecasts, but, besides, also the effects of political events flow in with – just in the relation on how these events can affect the economy of the affected countries. The aim lies in it very early the macroeconomic changes of the trend to recognise and to use this then gainful.
With Dedicated Short Bias strategies, however, securities are valued and as overrated judged versions become empty-sold. Moreover, securities are borrowed by third and then are sold at the market. The profit itself is earned when the so sold securities are bought back at a later time more favourably and thus a profit margin is achieved. The empty sales are composed from a total of four different legal shops from which in each case two are cancelled to the dismantling and two on the construction of the position. With the construction of the empty shorts will borrow in the first step of the Short Seller first once shares of a security loaner against a fee. Indeed, still securities must be deposited of course beside the fee. Then the so borrowed shares are sold at the market and then it is hoped for the fact that the share prices fall – then the shares are bought back and returned to the loaner.
The Hedgefonds strategies which invest in so-called threshold countries are summarised under the strategy "Emerging Markets". Besides, is invested in loans or shares of these countries and one speculates on the fact that these countries will go through a positive business development. Besides, is almost never fallen back on empty sales or the application of derivatives, because are possible only in the rarest cases – it concerns almost always pure Buy And lovely strategies. With threshold countries it concerns states which can be shortly before the crossing of the Third World country in an industrial state and have with it a huge economic growth. Indeed, it also gives at the same time high political and economic risks and unstable economic systems and judicial systems also flow in there.
Long/Short Equity strategies, however, contain Long-as well as Short positions in the appointment and cash market. With this Hedgefonds strategy at the same time undervalued shares are bought up and undervalued shares empty-sold. At last one speculates on the course increase as an undervalued judged share, while the rate of the overrated share should fall. This strategy is of the Equity Market Neutrally a strategy very alike and thus there also are here two style directions: The Basically Long/shorts of finding as well as the quantitative Long/shorts of finding.
No comments:
Post a Comment