AIMA

The Alternative Investment Management Association

Alternative Investment Management Association Representing the global hedge fund industry

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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.
 
articles of association

The legal document filed with a state to create a corporation. Also known as the certificate of incorporation or corporate charter. It establishes a corporation's purpose and structure. It conveys the corporation's purpose, name, primary place of business, names of directors, and the amounts and types of stock it is authorized to issue. Also called a Memorandum and Articles of Incorporation in certain jurisdictions.

articles of incorporation

The legal document filed with a state to create a corporation. Also known as the certificate of incorporation or corporate charter. It establishes a corporation's purpose and structure. It conveys the corporation's purpose, name, primary place of business, names of directors, and the amounts and types of stock it is authorized to issue. Also called a Memorandum and Articles of Association in certain jurisdictions.

asset allocation

The structure of a portfolio - namely the allocation of specific portions of it across different assets classes, i.e. securities, property, cash, fixed interest, etc.

assets under management

Includes all investments, leveraged and unleveraged, including cash, that are managed and administered by a fund manager for itself and its customers. ACTUAL unleveraged assets. NOTIONAL levered assets.

Associated Person

(1) A person in the securities business who is affiliated with a NASDAQ member firm, whether or not the person is registered or exempt from registration with NASD. (2) A person registered with the CFTC or NFA who solicits orders, customers or customer funds on behalf of a Futures Commission Merchant, an Introducing Broker, a Commodity Trading Advisor, a Commodity Pool Operator or an Agricultural Trade Option Merchant.

at-the-market

An order to buy or sell a security or futures contract at whatever price is obtainable when the order reaches the trading facility. See market order.

at-the-money

When an option's strike price is the same as the current trading price of the underlying commodity, the option is at-the-money.

auditor

The Auditor issues a written opinion upon the fair presentation of the Fund's annual financial statements, in accordance with the Fund's applicable accounting and auditing standards, on the basis of a year-end audit of the Fund's books and records.

AUM

See assets under management

average rate of return

The mean average of a fund's returns over a given number of periods. It is calculated by dividing the sum of the rates of return over those periods by the number of periods.

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