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.
 
macro fund

A hedge fund that specializes in strategies designed to profit from expected macroeconomic events.

managed account

A vehicle in which investors give a manager or broker discretion to buy and sell securities, futures or other instruments on their behalf, either unconditionally or with restrictions.

managed futures fund

Funds that, invest in listed financial and commodity markets as well as in currency markets all over the world. Most Managed Futures (CTA) / Global Macro funds play on market momentum (i.e. trend followers) or follow discretionary strategies. The others either use quantitative, fundamental or technical analysis. Computer programs that use technical analysis tools like relative strength indicators and momentum are used to make investment decisions. The majority of these funds are specialized and on proprietary trading techniques. Most Managed Futures (CTA) / Global Macro funds use leverage either explicitly or implicitly (through the use of derivatives) to increase the impact of market moves on their portfolios.

managed futures manager

See Commodity trading advisor.

Management Expense Ration
A ratio expressing the management, trustee - and certain other - expenses of a pooled investment fund as a proportion of the net asset value of the fund.
management fee

A fee paid to a fund manager for managing and providing services to the fund as well as to cover certain operating expenses. Investors are typically charged separately for costs incurred for outsourced services. The management fee is generally expressed as a charge against investor assets and typically ranges from an annual 0.5% to 2% of an investor's entire holdings in the fund, and usually collected on a quarterly basis.

manipulation

Any planned operation, transaction, or practice that causes or maintains an artificial price. Specific types include corners and squeezes as well as unusually large purchases or sales of a commodity or security in a short period of time in order to distort prices, and putting out false information in order to distort prices.

many-to-many

Refers to a trading platform in which multiple participants have the ability to execute or trade commodities, derivatives, or other instruments by accepting bids and offers made by multiple other participants.

margin

The amount of capital that has to be deposited as collateral against future losses in order to enter into an investment which gives exposure to the changes in the market value of an asset of greater value.

margin call

Occurs when a broker demands that the holder of a margin loan put up extra cash or securities as collateral for that loan, usually because the value of the securities purchased with the loan has declined. When such a call is made, an investor has the option to put up cash to reduce the loan amount, add more securities to the margin account to raise the portfolio value or sell securities in the account to reduce the loan balance. In the US, also known as a ‘Reg’ (Regulation) T call.

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Sub Menu

  1. Research
    1. AIMA Research
    2. Industry research
    3. Surveys
      1. 2016 Global Hedge Fund Survey with KPMG and the MFA
      2. 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