AIMA

The Alternative Investment Management Association

Alternative Investment Management Association Representing alternative asset managers globally

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Glossary

AIMA's Glossary has been developed for all those with an interest in the alternative investment industry - from the beginner to the advanced practitioner.

You will find a considerable overlap of content with the traditional fund management industry - the instruments used, the service providers employed, etc.  However, the hedge fund industry is individual in the way in which it uses these resources.

For reasons of law and accuracy, this is not a wiki.  It is a work-in-progress, however, and we invite you to submit new items for inclusion below (including the proposed definition).

  • We express our sincere thanks to Stanley Marchon, Vincent Kuhn, Nicolas Watin-Augouard, Stephen Foster and Sunil Gopalan for the creation of this resource. 
  • Special thanks are also extended to Anne Taulbut and Jennifer Nye of Katten Muchin Rosenman Cornish for the extensive legal review.
 
FCM
See Futures Commission Merchant (FCM).
fees

See Incentive fee. See Performance Fee. See Management fee. See Redemption fee.

fixed income arbitrage

Fixed Income Arbitrage funds try to exploit pricing anomalies within Fixed Income Markets. They generally attempt to hedge out most interest rate risk by taking offsetting positions in similar securities (government bonds, corporate bonds, asset-backed securities, etc.). There are two major categories of fixed income arbitrage strategies: see Relative value and Market neutral.

floor broker

A person with exchange trading privileges who, in any it, ring, post, or other place provided by an exchange for the meeting of persons similarly engaged, executes for another person any orders for the purchase or sale of any commodity for future delivery.

floor trader

A member of a stock or commodities exchange who trades on the floor of that exchange for his or her own account. May also execute trades for third parties and may be referred to as a "local".

foreign exchange market

Also known as Forex.

Forex
Refers to the OTC market for foreign exchange transactions. Also called the Foreign exchange market.
forward

A private, over-the-counter (OTC) derivative instrument that requires one party to sell and another party to buy a specific security or commodity at a pre-set price on an agreed-upon date in the future. Similar to a futures contract, which is traded on an exchange.

forward rate agreements

A forward rate agreement (FRA) is an agreement whereby the seller guarantees the buyer a specific rate of interest for a specific period of time commencing on a specified date in the future. A FRA is frequently used to hedge the floating rate risk in a swap transaction. FRAs are conceptually similar to interest rate futures, offering advantages of precise tailoring to specific transactions such as swaps, but having the disadvantages that they do not trade on an exchange, are not marginable and (as with a swap) are susceptible to counterparty credit risk.

FRA
See Forward rate agreements.
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  1. Research
    1. AIMA Research
    2. Industry research
    3. Surveys
      1. 2016 Global Hedge Fund Survey with KPMG and the MFA
      2. Liquidity Pulse Check
      3. Private Credit
  2. AIMA Journal
    1. Recent issues
    2. Search AIMA Journal articles
    3. AIMA Journal archive: 2010-2012
  3. '25 Years in Hedge Funds'
    1. Introduction - AIMA's global mantra
    2. How the hedge fund industry has evolved over the last 25 years
    3. How the regulatory landscape has changed for hedge funds
    4. Separating fiction from reality: The most common and persistent hedge fund myths
    5. The next five years - where is the hedge fund industry headed?
    6. Virtual roundtable - Leading figures from the hedge fund industry look ahead to 2020
    7. Learning the lessons from the past
    8. Accessing hedge funds: how ‘solutions’ are the new FoHFs
    9. 'Big data': The growth of the global hedge fund industry
  4. "The Case for Hedge Funds"
    1. Global Hedge Fund Industry Paper: The value of our industry
    2. The Value of the Hedge Fund Industry to Investors, Markets and the Broader Economy: Research commissioned by AIMA and KPMG
    3. The Evolution of an Industry: KPMG/AIMA Global Hedge Fund Survey
    4. Contributing to Communities: A global review of charitable and philanthropic activities by the hedge fund industry
    5. Beyond 60-40: The evolving role of hedge funds in institutional investor portfolios
    6. The Cost of Compliance: Global hedge fund survey by AIMA, MFA and KPMG
    7. Capital Markets and Economic Growth: Long-term trends and policy challenges
    8. Apples and Apples: How to better understand hedge fund performance
    9. The Extra Mile: Partnerships between hedge funds and investors
    10. Key articles by AIMA on the case for hedge funds
  5. AIMA Guides to Sound Practices
  6. AIMA guides for institutional investors
  7. Transparent, Sophisticated, Tax Neutral - The Truth About Offshore Funds
  8. CAIA Association pages
    1. Fundamentals of Alternative Investments
  9. Regulatory Compliance Association pages
    1. About the Regulatory Compliance Association
    2. RCA Curricula and initiatives for alternative investment firms
    3. Meet the regulators and Sr. Fellows
  10. Certified Investment Fund Director programme
  11. Services to Start-up Managers
  12. Glossary
  13. Cyber Security Resources