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pair trading

A relative valueThis strategy seeks to construct a portfolio which takes advantage of the pricing anomalies detected while maintaining a diversified risk profile. Neutrality with regard to the duration is not systematically targeted. The main objective is to maximize the portfolio's return while controlling the risk. approach that seeks to identify similar companies in a given sector, whose securities are trading or are anticipated to trade at a wide differential. The manager of such a fund would assume a short position in the overvalued security, while taking a long positionHolding a positive amount of an asset. in the undervalued one.

performance fee

A fee paid to a fund manager for providing returns on an investment, often by reference to a benchmarkAny basis of measurement (security or index), used as a reference point, against which a comparison and evaluation of performance of an investment portfolio can be made. or Hurdle rate. This fee is based on net new profits and is earned by the hedge fund managerManager of one or more Hedge funds. See Hedge fund. for the period concerned. It may be paid annually or quarterly but accrues monthly in the fund valuation. Also known as Incentive fee.

performance trigger

Also known as Stop Loss, it is the point at which a hedge fund's losses cause specific contractual provisions designed to insulate investors from further losses.

PIP

The smallest price unitA generic term used to describe the 'instrument' (share, bond, loan note, participation interest, etc.) which is issued by a product. Investors invest in a product by subscribing for units and can also redeem their units at the prevailing net asset value per unit, as detailed in the relevant product prospectus. of a commodityA commodity, as defined in the Commodity Exchange Act, includes the agricultural commodities enumerated in Section 1a(4) of the Commodity Exchange Act and all other goods and articles, except onions as provided in Public Law 85-839 (7 U.S.C. § 13-1), a 1958 law that banned futures trading in onions, and all services, rights, and interests in which contracts for future delivery are presently or in the future dealt in. or currency.

PIPEs

See Private Investments in Public Entities.

pit

A specially constructed area on the trading floorA physical trading facility where traders make bids and offers via open outcry or the specialist system. of some exchanges where trading in a futures contract(1) A term of reference describing a unit of trading for a commodity future or option; (2) an agreement to buy or sell a specified commodity, detailing the amount and grade of the product and the date on which the contract will mature and become deliverable. is conducted. On other exchanges, the term ring designates the trading area for a commodityA commodity, as defined in the Commodity Exchange Act, includes the agricultural commodities enumerated in Section 1a(4) of the Commodity Exchange Act and all other goods and articles, except onions as provided in Public Law 85-839 (7 U.S.C. § 13-1), a 1958 law that banned futures trading in onions, and all services, rights, and interests in which contracts for future delivery are presently or in the future dealt in..

placement

The expansion of a company's capital base by selling a parcel of new securities to a single substantial investorSee Eligible investor. See Accredited investor. Investors in hedge funds can be categorised in many ways but the most clear distinction is between fund of hedge funds managers and direct investors: 1. Fund of hedge funds managers: These entities manage diversified portfolios of hedge funds (usually in the form of collective investment schemes), and provide their investors with services such as fund selection and risk management in return for a fee. 2. Direct investors: Hedge funds are aimed primarily at institutional and sophisticated investors. Direct investors include pension funds (public and private), endowments, foundations and family offices. or institution on a private placementThe offer and sale of any security other than by way of public offer to a limited number of investors and which, if made in the US, is exempt from the registration requirements under the US Securities Act of 1933, as amended. See Regulation D. basis and generally without the issue of a prospectus. A placementThe expansion of a company's capital base by selling a parcel of new securities to a single substantial investor or institution on a private placement basis and generally without the issue of a prospectus. A placement could also involve selling existing shares in a company. could also involve selling existing shares in a company.

portfolio efficient frontier

See Efficient frontier.

portfolio insurance

A trading strategyThe particular investment process employed by a manager in the application of an investment style. that uses stock index futures and/or stock index options to protect stock portfolios against market declines.

portfolio manager

A company or individual that runs capital on behalf of an investment fund, such as a hedge fund. The portfolio managerA company or individual that runs capital on behalf of an investment fund, such as a hedge fund. The portfolio manager is often the general partner of the fund's limited partnership. It may be an employee of the fund management firm, or an external entity with which the hedge fund makes a passive investment. is often the general partner of the fund's limited partnership. It may be an employee of the fund management firm, or an external entity with which the hedge fund makes a passive investment.

View all Results|    Displaying 1 - 10 of 29 Terms   Jump to page: 1 | 2 | 3 | Next | Last