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<p>Foreword by Mark Anson xv</p> <p><b>1 Introduction 1</b></p> <p><b>PART I HEDGE FUND OVERVIEW</b></p> <p><b>2 History Revisited 7</b></p> <p>2.1 The very early years: The 1930s 7</p> <p>2.2 The formative years (1949–1968) 8</p> <p>2.3 The dark ages (1969–1974) 11</p> <p>2.4 The renaissance (1975–1997) 12</p> <p>2.5 The Asian and Russian crises (1997–1998) 15</p> <p>2.6 The equity bubble years 18</p> <p>2.7 Hedge funds today 19</p> <p>2.8 The key characteristics of modern hedge funds 24</p> <p>2.9 The future 35</p> <p><b>3 Legal Environment 37</b></p> <p>3.1 The situation in the US 39</p> <p>3.1.1 The Securities Act (1933) 39</p> <p>3.1.2 Securities Exchange Act (1934) 44</p> <p>3.1.3 Investment Company Act 46</p> <p>3.1.4 Investment Advisers Act (1940) 48</p> <p>3.1.5 Blue-sky laws 55</p> <p>3.1.6 National Securities Markets Improvement Act (1996) 55</p> <p>3.1.7 Employee Retirement Income Security Act (1974) 56</p> <p>3.1.8 Other regulations 56</p> <p>3.1.9 The Commodity Futures Trading Commission 57</p> <p>3.2 The situation in Europe 59</p> <p>3.2.1 The UCITS directives and mutual fund regulation 59</p> <p>3.2.2 The case of European hedge funds 62</p> <p>3.2.3 Germany 63</p> <p>3.2.4 France 69</p> <p>3.2.5 Italy 75</p> <p>3.2.6 Switzerland 76</p> <p>3.2.7 Ireland 78</p> <p>3.2.8 Spain 80</p> <p>3.3 The situation in Asia 81</p> <p>3.4 Internet and the global village 81</p> <p><b>4 Operational and Organizational Structures 85</b></p> <p>4.1 Legal structures for stand-alone funds 85</p> <p>4.1.1 In the United States (“onshore”) 85</p> <p>4.1.2 Outside the United States (“offshore”) 87</p> <p>4.2 A network of service providers 90</p> <p>4.2.1 The sponsor and the investors 91</p> <p>4.2.2 The board of directors 91</p> <p>4.2.3 The investment adviser 92</p> <p>4.2.4 The investment manager or management company 92</p> <p>4.2.5 The brokers 93</p> <p>4.2.6 The fund administrator 99</p> <p>4.2.7 The custodian/trustee 103</p> <p>4.2.8 The legal counsel(s) 103</p> <p>4.2.9 The auditors 105</p> <p>4.2.10 The registrar and transfer agent 106</p> <p>4.2.11 The distributors 106</p> <p>4.2.12 The listing sponsor 107</p> <p>4.3 Specific investment structures 108</p> <p>4.3.1 Mirror funds 108</p> <p>4.3.2 Master/feeder structures 109</p> <p>4.3.3 Managed accounts 112</p> <p>4.3.4 Umbrella funds 114</p> <p>4.3.5 Multi-class/multi-series funds 115</p> <p>4.3.6 Side pockets 116</p> <p>4.3.7 Structured products 117</p> <p>4.4 Disclosure and documents 118</p> <p>4.4.1 Private placement memorandum (PPM) 118</p> <p>4.4.2 Memorandum and articles of association 118</p> <p>4.4.3 ADV form 118</p> <p>4.4.4 Limited partnership agreements 119</p> <p>4.4.5 Side letters 119</p> <p><b>5 Understanding the Tools Used by Hedge Funds 121</b></p> <p>5.1 Buying and selling using a cash account 121</p> <p>5.2 Buying on margin 122</p> <p>5.2.1 Mechanics 122</p> <p>5.2.2 Buying on margin: an example 124</p> <p>5.3 Short selling and securities lending 126</p> <p>5.3.1 Mechanics of short selling 127</p> <p>5.3.2 A detailed example 134</p> <p>5.3.3 Restrictions on short selling 135</p> <p>5.3.4 Potential benefits of short selling 139</p> <p>5.3.5 Alternatives to securities lending: repos and buys/sell backs 140</p> <p>5.4 Derivatives 142</p> <p>5.4.1 Terminology 144</p> <p>5.4.2 Basic derivatives contracts 144</p> <p>5.4.3 Credit derivatives 146</p> <p>5.4.4 Benefits and uses of derivatives 149</p> <p>5.5 Leverage 151</p> <p><b>PART II HEDGE FUND STRATEGIES AND TRADE EXAMPLES</b></p> <p><b>6 Introduction 159</b></p> <p><b>7 Long/Short Equity Strategies 163</b></p> <p>7.1 The mechanics of long/short equity investing 163</p> <p>7.1.1 A single position 163</p> <p>7.1.2 Sources of return and feasible portfolios 165</p> <p>7.1.3 Disadvantages of long/short equity investing 169</p> <p>7.2 Investment approaches 170</p> <p>7.2.1 The valuation-based approach 170</p> <p>7.2.2 Sector specialist hedge funds 174</p> <p>7.2.3 Quantitative approaches 175</p> <p>7.2.4 Equity non-hedge hedge funds 175</p> <p>7.2.5 Activist strategies 176</p> <p>7.3 Historical performance 181</p> <p><b>8 Dedicated Short 187</b></p> <p>8.1 The pros and cons of dedicated short selling 187</p> <p>8.2 Typical target companies and reactions 188</p> <p>8.3 Historical performance 193</p> <p><b>9 Equity Market Neutral 197</b></p> <p>9.1 Definitions of market neutrality 197</p> <p>9.1.1 Dollar neutrality 197</p> <p>9.1.2 Beta neutrality 198</p> <p>9.1.3 Sector neutrality 200</p> <p>9.1.4 Factor neutrality 200</p> <p>9.1.5 A double alpha strategy 202</p> <p>9.2 Examples of equity market neutral strategies and trades 203</p> <p>9.2.1 Pairs trading 203</p> <p>9.2.2 Statistical arbitrage 207</p> <p>9.2.3 Very-high-frequency trading 208</p> <p>9.2.4 Other strategies 211</p> <p>9.3 Historical performance 211</p> <p><b>10 Distressed Securities 215</b></p> <p>10.1 Distressed securities markets 215</p> <p>10.1.1 The origins: railways 215</p> <p>10.1.2 From high yield to distressed securities 216</p> <p>10.1.3 The distressed securities market today 219</p> <p>10.2 Distressed securities investing 226</p> <p>10.2.1 Why distressed securities? 226</p> <p>10.2.2 Legal framework 227</p> <p>10.2.3 Valuation 228</p> <p>10.2.4 Active versus passive 230</p> <p>10.2.5 Risks 232</p> <p>10.3 Examples of distressed trades 233</p> <p>10.3.1 Kmart 233</p> <p>10.3.2 Failed leveraged buyouts 234</p> <p>10.3.3 Direct lending 235</p> <p>10.3.4 The case of airlines 236</p> <p>10.4 Historical performance 239</p> <p><b>11 Merger Arbitrage 243</b></p> <p>11.1 Mergers and acquisitions: a historical perspective 243</p> <p>11.2 Implementing merger arbitrage: basic principles 246</p> <p>11.2.1 Arbitraging a cash tender offer 247</p> <p>11.2.2 Arbitraging a stock-for-stock offer (fixed exchange rate) 250</p> <p>11.2.3 Arbitraging more complex offers 252</p> <p>11.3 The risks inherent in merger arbitrage 254</p> <p>11.4 Historical performance 263</p> <p><b>12 Convertible Arbitrage 269</b></p> <p>12.1 The terminology of convertible bonds 269</p> <p>12.2 Valuation of convertible bonds 272</p> <p>12.2.1 Valuation from an academic perspective 272</p> <p>12.2.2 Valuation from a practitioner perspective (the component approach) 273</p> <p>12.2.3 Risk measurement and the Greek alphabet 277</p> <p>12.3 Convertible arbitrage: the basic delta hedge strategy 279</p> <p>12.4 Convertible Arbitrage in practice: stripping and swapping 285</p> <p>12.5 The strategy evolution 287</p> <p>12.6 Historical performance 293</p> <p><b>13 Fixed Income Arbitrage 297</b></p> <p>13.1 The basic tools of fixed income arbitrage 297</p> <p>13.2 Examples of sub-strategies 299</p> <p>13.2.1 Treasuries stripping 299</p> <p>13.2.2 Carry trades 301</p> <p>13.2.3 On-the-run versus off-the-run Treasuries 301</p> <p>13.2.4 Yield-curve arbitrage 303</p> <p>13.2.5 Swap-spread arbitrage 304</p> <p>13.2.6 The Treasury–Eurodollar spread (TED) 305</p> <p>13.3 Historical performance 306</p> <p><b>14 Emerging Markets 311</b></p> <p>14.1 The case for emerging market hedge funds 311</p> <p>14.2 Examples of strategies 314</p> <p>14.2.1 Equity strategies 314</p> <p>14.2.2 Fixed income strategies 319</p> <p>14.3 Historical performance 323</p> <p><b>15 Global Macro 327</b></p> <p>15.1 Global macro investment approaches 327</p> <p>15.2 Examples of global macro trades 328</p> <p>15.2.1 The ERM crisis (1992) 329</p> <p>15.2.2 The ECU arbitrage 332</p> <p>15.2.3 The Asian crisis (1997) 333</p> <p>15.2.4 The euro convergence (1995–1997) 337</p> <p>15.2.5 Carry trades 340</p> <p>15.2.6 The twin deficits 344</p> <p>15.2.7 Risk management and portfolio construction 345</p> <p>15.3 Historical performance 346</p> <p><b>16 Managed Futures and Commodity Trading Advisors (CTAs) 351</b></p> <p>16.1 The various styles of managed futures 352</p> <p>16.1.1 Trading approach: discretionary versus systematic 352</p> <p>16.1.2 Type of analysis: fundamental versus technical 354</p> <p>16.1.3 Source of returns: trend followers and non trend followers 354</p> <p>16.1.4 Timeframe for trades 355</p> <p>16.2 Examples of systematic trading rules 355</p> <p>16.2.1 Moving Average Convergence/Divergence (MACD) 355</p> <p>16.2.2 Examples of trading ranges signals 361</p> <p>16.2.3 Portfolio construction 363</p> <p>16.2.4 Transparency or regulated black boxes? 363</p> <p>16.2.5 Investment vehicles 365</p> <p>16.2.6 Back-testing and calibration 365</p> <p>16.3 Historical Performance 366</p> <p>16.4 The future of managed futures 370</p> <p><b>17 A Smorgasbord of Other Strategies 373</b></p> <p>17.1 Capital structure arbitrage and credit strategies 373</p> <p>17.2 Weather derivatives, weather insurance and catastrophe bonds 381</p> <p>17.3 Mutual Fund Arbitrage 382</p> <p>17.3.1 The forward pricing mechanism 383</p> <p>17.3.2 The loopholes in forward pricing 384</p> <p>17.3.3 Unethical, but persistent 386</p> <p>17.3.4 A brutal ending 387</p> <p>17.4 Arbitraging between NAVs and quoted price: Altin AG 388</p> <p>17.5 Split strike conversion 390</p> <p>17.6 Event-Driven Special Situations 392</p> <p>17.7 Cross-listing and dual-listing arbitrage 393</p> <p>17.7.1 Cross-listed companies and ADRs 393</p> <p>17.7.2 Dual-listed companies 394</p> <p>17.8 From public to private equity 395</p> <p>17.9 Regulation D and PIPEs funds 397</p> <p>17.10 IPO Lock-up Expirations 398</p> <p><b>PART III MEASURING RETURNS, RISKS AND PERFORMANCE</b></p> <p><b>18 Measuring Net Asset Values and Returns 403</b></p> <p>18.1 The difficulties of obtaining information 404</p> <p>18.2 Equalization, crystallization and multiple share classes 406</p> <p>18.3 The inequitable allocation of incentive fees 406</p> <p>18.4 The free-ride syndrome 407</p> <p>18.5 Onshore versus Offshore Funds 408</p> <p>18.6 The multiple share approach 409</p> <p>18.7 The equalization factor/depreciation deposit approach 410</p> <p>18.8 Simple Equalization 414</p> <p>18.9 Consequences for performance calculation 414</p> <p>18.10 The holding period return 415</p> <p>18.11 Annualizing 417</p> <p>18.12 Multiple hedge fund aggregation 418</p> <p>18.13 Continuous compounding 419</p> <p><b>19 Return Statistics and Risk 423</b></p> <p>19.1 Calculating return statistics 423</p> <p>19.1.1 Central tendency statistics 426</p> <p>19.1.2 Gains versus losses 428</p> <p>19.2 Measuring risk 429</p> <p>19.2.1 What is risk? 430</p> <p>19.2.2 Range, quartiles and percentiles 430</p> <p>19.2.3 Variance and volatility (standard deviation) 431</p> <p>19.2.4 Back to histograms, return distributions and z-scores 434</p> <p>19.3 Downside risk measures 439</p> <p>19.3.1 From volatility to downside risk 439</p> <p>19.3.2 Semi-variance and semi-deviation 440</p> <p>19.3.3 The shortfall risk measures 443</p> <p>19.3.4 Value at risk 443</p> <p>19.3.5 Drawdown statistics 446</p> <p>19.4 Benchmark-related statistics 447</p> <p>19.4.1 Intuitive benchmark-related statistics 447</p> <p>19.4.2 Beta and market risk 448</p> <p>19.4.3 Tracking error 449</p> <p><b>20 Risk-Adjusted Performance Measures 451</b></p> <p>20.1 The Sharpe ratio 455</p> <p>20.1.1 Definition and interpretation 455</p> <p>20.1.2 The Sharpe ratio as a long/short position 457</p> <p>20.1.3 The statistics of Sharpe ratios 457</p> <p>20.2 The Treynor ratio and Jensen alpha 460</p> <p>20.2.1 The CAPM 460</p> <p>20.2.2 The market model 462</p> <p>20.2.3 The Jensen alpha 463</p> <p>20.2.4 The Treynor (1965) ratio 465</p> <p>20.2.5 Statistical significance 466</p> <p>20.2.6 Comparing Sharpe, Treynor and Jensen 466</p> <p>20.2.7 Generalizing the Jensen alpha and the Treynor ratio 467</p> <p>20.3 M², M³ and Graham–Harvey 468</p> <p>20.3.1 The M² performance measure 468</p> <p>20.3.2 GH1 and GH2 470</p> <p>20.4 Performance measures based on downside risk 472</p> <p>20.4.1 The Sortino ratio 472</p> <p>20.4.2 The upside potential ratio 473</p> <p>20.4.3 The Sterling and Burke ratios 474</p> <p>20.4.4 Return on VaR (RoVaR) 475</p> <p>20.5 Conclusions 476</p> <p><b>21 Databases, Indices and Benchmarks 479</b></p> <p>21.1 Hedge fund databases 479</p> <p>21.2 The various biases in hedge fund databases 479</p> <p>21.2.1 Self-selection bias 480</p> <p>21.2.2 Database/sample selection bias 482</p> <p>21.2.3 Survivorship bias 482</p> <p>21.2.4 Backfill or instant history bias 484</p> <p>21.2.5 Infrequent pricing and illiquidity bias 485</p> <p>21.3 From databases to indices 487</p> <p>21.3.1 Index construction 487</p> <p>21.3.2 The various indices available and their differences 490</p> <p>21.3.3 Different indices – different returns 503</p> <p>21.3.4 Towards pure hedge fund indices 505</p> <p>21.4 From indices to benchmarks 508</p> <p>21.4.1 Absolute benchmarks and peer groups 509</p> <p>21.4.2 The need for true benchmarks 510</p> <p><b>PART IV INVESTING IN HEDGE FUNDS</b></p> <p><b>22 Introduction 515</b></p> <p><b>23 Revisiting the Benefits and Risks of Hedge Fund Investing 517</b></p> <p>23.1 The benefits of hedge funds 518</p> <p>23.1.1 Superior historical risk/reward trade-off 518</p> <p>23.1.2 Low correlation to traditional assets 520</p> <p>23.1.3 Negative vs positive market environments 523</p> <p>23.2 The benefits of individual hedge fund strategies 527</p> <p>23.3 Caveats of hedge fund investing 534</p> <p><b>24 Asset Allocation and Hedge Funds 537</b></p> <p>24.1 Diversification and portfolio construction: an overview 537</p> <p>24.1.1 Diversification 538</p> <p>24.1.2 Portfolio construction 539</p> <p>24.1.3 Asset allocation 541</p> <p>24.2 Strategic asset allocation without hedge funds 543</p> <p>24.2.1 Identifying the investor’s financial profile: the concept of utility functions 543</p> <p>24.2.2 Establishing the strategic asset allocation 546</p> <p>24.3 Introducing hedge funds in the asset allocation 547</p> <p>24.3.1 Hedge funds as a separate asset class 547</p> <p>24.3.2 Hedge funds vs traditional asset classes 548</p> <p>24.3.3 Hedge funds as traditional asset class substitutes 549</p> <p>24.4 How much should be allocated to hedge funds? 551</p> <p>24.4.1 An informal approach 552</p> <p>24.4.2 The optimizers’ answer: 100% in hedge funds 553</p> <p>24.4.3 Static versus dynamic allocations 554</p> <p>24.4.4 Dealing with “return management” 555</p> <p>24.4.5 Optimizer’s inputs and the GIGO syndrome 556</p> <p>24.4.6 Non-standard efficient frontiers 560</p> <p>24.4.7 How much should we allocate to hedge funds? 561</p> <p>24.5 Hedge funds as portable alpha overlays 561</p> <p>24.6 Hedge funds as sources of alternative risk exposure 564</p> <p>24.7 Risk budgeting and the separation of alpha from beta 565</p> <p><b>25 Hedge Fund Selection: A Route Through the Maze 569</b></p> <p>25.1 Stating objectives 569</p> <p>25.2 Filtering the universe 570</p> <p>25.3 Quantitative Analysis 571</p> <p>25.4 Qualitative Analysis 572</p> <p>25.5 Due Diligence: between art and science 573</p> <p>25.5.1 The strategy 573</p> <p>25.5.2 The fund itself 574</p> <p>25.5.3 The management team 575</p> <p>25.5.4 The infrastructure 575</p> <p>25.5.5 The process 576</p> <p>25.6 Ongoing monitoring 576</p> <p>25.7 Common mistakes in the selection process 577</p> <p><b>26 Funds of Hedge Funds 579</b></p> <p>26.1 What are funds of hedge funds? 579</p> <p>26.2 Advantages of funds of funds 579</p> <p>26.2.1 Efficient Risk Diversification 580</p> <p>26.2.2 Affordability and Accessibility 582</p> <p>26.2.3 Professional management and built-in asset allocation 583</p> <p>26.2.4 Access to closed funds 583</p> <p>26.2.5 Better internal and external transparency 584</p> <p>26.3 The dark side of funds of funds 584</p> <p>26.3.1 Yet another layer of fees! 584</p> <p>26.3.2 Extra liquidity 585</p> <p>26.3.3 Lack of control, overdiversification and duplication 587</p> <p>26.4 Selecting a fund of funds 587</p> <p>26.5 Fund allocation: A look inside the “black box” 588</p> <p>26.5.1 Qualitative approaches 588</p> <p>26.5.2 Quantitative approaches 589</p> <p>26.6 The future of funds of funds 589</p> <p><b>27 Structured Products on Hedge Funds 591</b></p> <p>27.1 Total return swaps linked to hedge funds 591</p> <p>27.2 Call options on hedge funds 592</p> <p>27.3 Basic notes and certificates 593</p> <p>27.4 Capital protected notes 594</p> <p>27.4.1 The financial engineering process of capital protected notes 595</p> <p>27.4.2 The first generation: the naive approach 595</p> <p>27.5 The second generation: The option-based approach 598</p> <p>27.6 The third generation: the dynamic trading approach 602</p> <p>27.7 The fourth generation: options on CPPI 608</p> <p>27.8 The flies in the ointment 608</p> <p>27.9 The future of capital guaranteed products 610</p> <p>27.10 Collateralized hedge fund obligations 610</p> <p>28 Conclusions 615</p> <p>Bibliography 617</p> <p>Index 625</p>

"...Das 'Handbook of Hedge Funds'deckt ein breites Spektrum zum Thema Hedgefonds ab und ist für Praktiker und Akademiker geeignet, die sich einen umfassenden Überblick zu dieser Asset-Klasse verschaffen wollen bzw. vertiefende Kenntnisse anstreben. Ein wichtiges Standardwerk..."<br> Absolut report Nr 36 Feb/März 2007

<p><b><i>About the author</i></b> <p><b>FRANÇOIS-SERGE LHABITANT</b>, PhD, is Chief Investment Officer at Kedge Capital in London. He was formerly a Member of Senior Management at Union Bancaire Privée, and prior to this, a Director at UBS/Global Asset Management. On the academic side, he is a Professor of Finance at the University of Lausanne and at EDHEC Business School. His specialist skills are in the areas of alternative investment (hedge funds) and emerging markets. He is the author of several books on these two subjects and has published numerous research and scientific popularisation articles. He is also a member of the Scientific Council of the <i>Autorité des Marches Financiers</i>, the French regulatory body. <p><i>"Lhabitant takes us from the early 1930s to the latest cutting edge research in the field of hedge funds, blending both theoretical and practical information in this handbook and leaving no stone unturned. This new updated text with its panoply of new information, loads of examples and cases for educational purposes is well worth the investment. It is a must for beginners, institutional investors and money managers, lawyers, accountants, academics. In essence the bible of hedge fund books, you cannot ask for better."</i><br/> <b>—Greg N. Gregoriou, Ph.D, Associate Professor of Finance, State University of New York (Plattsburgh)</b>

<p><b>Handbook of hedge funds</b> <p><b>François-Serge Lhabitant</b> <p><i>"With the Handbook of Hedge Funds, François-Serge Lhabitant has created the fundamental guide to hedge fund investments. It covers a lot of ground and can truly serve as an encyclopaedia for both the entry level investors as well as those who would like to delve a little deeper into specific themes. It also includes information on legal environments as well as operational aspects, which other recent publications are clearly lacking."</i><br/> <b>—Barbara Rupf Bee, Chief Executive Officer, HSBC Republic Investments Limited</b> <p><i>"Everybody talks about hedge funds these days, but not many people seem to know too much about them. François Lhabitant is the exception. His first book was great and this one is even better. It provides an excellent and unique introduction to the subject; straightforward, objective and with lots of insightful examples. For anyone looking for a serious introduction to hedge funds, this is the book to read."</i><br/> <b>—Harry M. Kat, PhD, Professor of Risk Management and Director Alternative Investment Research Centre, Cass Business School, London</b> <p><i>"One of the most comprehensive book about hedge funds ever written. A must read for anyone seeking a thorough understanding of the sector. The book offers a good combination of theory and practice, with the use of interesting and recent case studies. It is very useful in addressing misconceptions and throws light where light is needed."</i><br/> <b>—Florence Lombard, Executive Director, The Alternative Investment Management Association Limited (AIMA)</b> <p><i>"Within the past decade, hedge funds have grown to become an accepted part of the investment landscape. With that growth, however, a number of myths have also come into existence. This book is a must read for those individuals who wish to know what is fact and what is not. Moreover, Lhabitant has done it in a manner which educates rather than confuses. Simply put, any academic, practitioner or serious investor should find a place for this on their bookshelf."</i><br/> <b>—Thomas Schneeweis, Michael and Cheryl Philipp Professor of Finance, University of Massachusetts, Director of the Center for International Securities and Derivatives Markets</b> <p><i>"This book is an outstanding achievement that brings the reader into the fascinating world of hedge funds. The combined practitioner and academic experiences and records of the author are well translated into this book that gives not only a detailed overview of the industry but detailed explanations of the strategies and deals that are conducted by hedge fund managers. A must read!"</i><br/> <b>—Pascal Botteron, PhD, Director of Hedge Fund Investments, Deutsche Bank (Suisse)</b>

“With the Handbook of Hedge Funds, François-Serge Lhabitant has created the fundamental guide to hedge fund investments. It covers a lot of ground and can truly serves as an encyclopaedia for both the entry level investors as well as to those to would like do delve a little deeper into specific themes. It also includes information on legal environments as well as operational aspects, which other recent publications are clearly lacking.” <b>—Barbara Rupf Bee, Chief Executive Officer, HSBC Republic Investments Limited</b> <p/> “Everybody talks about hedge funds these days, but not many people seem to know too much about them. François Lhabitant is the exception. His first book was great, this one is even better. It provides an excellent and unique introduction to the subject; straightforward, objective and with lots of insightful examples. For anyone looking for a serious introduction to hedge funds, this is the book to read.” <b>—Harry M. Kat, PhD, Professor of Risk Management and Director Alternative Investment Research Centre, <st1:PlaceName w:st="on">Cass</st1:PlaceName> <st1:PlaceName w:st="on">Business</st1:PlaceName> <st1:PlaceType w:st="on">School</st1:PlaceType>, <st1:City w:st="on"><st1:place w:st="on">London</st1:place></st1:City></b> <p/> “One of the most comprehensive book about hedge funds ever written. A must read for anyone seeking a thorough understanding of the sector. The book offers a good combination of theory and practice, with the use of interesting and recent case studies. It is very useful in addressing misconceptions and throws light where light is needed.” <p/> <b>—<st1:City w:st="on"><st1:place w:st="on">Florence</st1:place></st1:City> Lombard, Executive Director, The Alternative Investment Management Association Limited (AIMA)</b> <p/> “Within the past decade, hedge funds have growth to become an accepted part of the investment landscape. With that growth, however, a number of myths have also come into existence. This book is a must read for those individuals who wish to know what is fact and what is not. Moreover, Lhabitant has done it in a manner which educates rather than confuses. Simply put, any academic, practitioner or serious investor should find a place for this on their bookshelf.” <b>—Thomas Schneeweis, Michael and Cheryl Philipp Professor of Finance, <st1:place w:st="on"><st1:PlaceType w:st="on">University</st1:PlaceType> of <st1:PlaceName w:st="on">Massachusetts</st1:PlaceName></st1:place>, Director of the Center for International Securities and Derivatives Markets</b> <p/> “This book is an outstanding achievement that brings the reader into the fascinating world of hedge funds. The combined practitioner and academic experiences and records of the author are well translated into this book that gives not only a detailed overview of the industry but detailed explanations of the strategies and deals that are conducted by hedge fund managers. A must read!” <b>—Pascal Botteron, PhD, Director of Head Hedge Fund Investments, Deutsche Bank (Suisse)</b>

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