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  • BFE Analyst Writing Assignment

    Diunggah oleh

    Sam Gu
    145 tayangan2 halaman
    As an analyst in BAAM's Business and Financial Evaluation team, you will be required to evaluate prospective hedge fund investments. There are definitive risks that must be evaluated and mitigated when allocating capital to a hedge fund. BAAM will only allocate to one of the two funds in question.

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    As an analyst in BAAM's Business and Financial Evaluation team, you will be required to evaluate prospective hedge fund investments. There are definitive risks that must be evaluated and mitigated when allocating capital to a hedge fund. BAAM will only allocate to one of the two funds in question.

    Hak Cipta:

    Attribution Non-Commercial (BY-NC)
    Unduh sebagai PDF, TXT atau baca online dari Scribd
    Tandai sebagai konten tidak pantas
    145 tayangan2 halaman

    BFE Analyst Writing Assignment

    Diunggah oleh

    Sam Gu
    As an analyst in BAAM's Business and Financial Evaluation team, you will be required to evaluate prospective hedge fund investments. There are definitive risks that must be evaluated and mitigated when allocating capital to a hedge fund. BAAM will only allocate to one of the two funds in question.

    Hak Cipta:

    Attribution Non-Commercial (BY-NC)
    Unduh sebagai PDF, TXT atau baca online dari Scribd
    Tandai sebagai konten tidak pantas
    dari 2

    As an analyst in BAAMs Business & Financial Evaluation (BFE) team, you will be requiredtoapplycriticalthinkingskillstoevaluateprospectivehedgefundinvestments.

    While this analysis is one part science and one part art, there are definitive risks that mustbeevaluatedandmitigatedwhenallocatingcapitaltoahedgefund. Directions: Forthetwoprospectivehedgefundsinquestion,pleasecomposeawrittenessaythat addresses the question below. The essay may not contain more than 800 words. Submissionsinexcessof800wordswillnotbeconsidered. YouarerequiredtocompletethisanalysisandwrittenrecommendationinFOURhours. Anysubmissionsthatarereturnedafterthefourhourtimeperiodhaselapsedwillnot beconsidered. Youmayuseanyresourcesthatareavailableinthepublicdomain(i.e.internetorother books/referencesources).Allsupplementarysourcesmustbeproperlyreferenced. Scenario: You are an analyst on BAAMs Business & Financial Evaluation team. Your Managing Director has asked you to evaluate the pros and cons of two prospective hedge fund investments.BAAMwillonlyallocatetooneofthetwofundsinquestion. Question: Please provide an investment recommendation based on your analysis of the two prospectivehedgefundsdetailedbelow.Inmakingyourinvestmentrecommendation, pleaseidentifythemostcriticalfactorsthatwereconsideredwhencomparingthetwo fundsastheywerecontemplatedwhileformulatingyourinvestmentthesis.

    HedgeFundA Strategy Assetsundermanagement Historicalannualreturn(beforefees) Terms: Managementfee Incentive/Performancefee Lockup(1) RedemptionFrequencyafterLockup(2) Investmentholdings: Equity(i.e.exchangetradedstocks) Equityderivatives(i.e.options) Illiquidprivateequityinvestments(intotal)* *Detailofprivateequityinvestments: RealestateinBrazil TechnologycompaniesinChina CellulartowersinIndia Executioncounterpartyexposure: JPMorgan MorganStanley SocieteGenerale Custodian(3) Investorbase: Numberofinvestorsintotal Largestinvestor's%oftotalfundassets Top5investors'%oftotalfundassets Serviceproviders(nameandcost): Auditor EquityLongShort $2billion 15%

    HedgeFundB EquityLongShort $2billion 15%

    2.00% 20.00% Sixmonths Monthly

    1.75% 20.00% Threeyears Annually

    50% 10% 40% 100% 20% 10% 10%

    50% 10% 40% 100% 20% 10% 10%

    50% 25% 25% HeddenBank

    90% 5% 5% BankofNewYork

    10 35% 65%

    100 9% 20%

    McKeonLLP $50Kperyear DeFalcoFundServices $100Kperyear

    Ernst&Young $150Kperyear CitcoFundServices $200Kperyear

    Administrator

    (1)Lockupreferstotheperiodoftimethatmustelapseafteraninitialinvestmentafterwhichaninvestormayrequestthat his/hercapitalbereturned.Asexample,ifyouinveston1/1/12,youmaygetyourcapitalbackon7/1/12forFundAand 1/1/15forFundB. (2)Thisreferstothefrequencythatonemaygetcapitalbackafterthelockupperiodhasexpired.Asanexample, eachmonthaninvestorinFundAmayrequestthatcapitalbereturned.AninvestorinFundBmayonlyrequest onceperyearattheendoftheyearthatcapitalbereturned.Asareminder,thesetermsONLYapplyafterthelockupperiodhas expired. (3)Ascustodian,thenotedentityholds100%ofthehedgefund'ssecurities.

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