Master 2023/2024

Alternative Investments

Category 'Best Course for Career Development'

Category 'Best Course for Broadening Horizons and Diversity of Knowledge and Skills'

Type: Elective course (Financial Analyst)

Area of studies: Finance and Credit

Delivered by: HSE Banking Institute

Where: HSE Banking Institute

When: 2 year, 1 module

Mode of studies: offline

Open to: students of one campus

Master’s programme: Financial Analyst

Language: English

ECTS credits: 3

Contact hours: 30

Course Syllabus

Abstract

Assets under management in vehicles classified as alternative investments have grown rapidly since the mid-1990s.This growth has largely occurred because of interest in these investments by institutions, such as endowment and pension funds, as well as by high-net worth individuals seeking diversification and return opportunities. Alternative investments are perceived to behave differently from traditional investments. Investors may seek either absolute return or relative return. Some investors hope alternative investments will provide positive returns throughout the economic cycle; this goal is an absolute return objective. Alternative investments are not free of risk, however, and their returns may be negative and/or correlated with other investments, including traditional investments, especially in periods of financial crisis. Some investors in alternative investments have a relative return objective. A relative return objective, which is often the objective of portfolios of traditional investment, seeks to achieve a return relative to an equity or a fixed-income benchmark.

Learning Objectives

• This course provides an overview of alternative investments for an institutional asset allocator or overseer of a portfolio containing both traditional and alternative assets. The student is assumed to have basic knowledge of investing in general and of traditional asset allocation in particular. The course is designed to build on the student’s existing knowledge by providing essential information about the characteristics, challenges, and purposes of alternative assets in the context of a well-diversified institutional portfolio

Expected Learning Outcomes

• Compare alternative investments with traditional investments
• Describe hedge funds, private equity, real estate, commodities, infrastructure, and other alternative investments, including, as applicable, strategies, sub-categories, potential benefits and risks, fee structures, and due diligence
• Describe potential benefits of alternative investments in the context of portfolio management
• Describe, calculate, and interpret management and incentive fees and net-of- fees returns to hedge funds
• Describe issues in calculating returns on hedge funds, private equity, real estate, commodities, and infrastructure
• Describe risk management of alternative investments

Course Contents

• Introduction
• Hedge Funds
• Private Capital
• Real Estate
• Natural Resources
• Infrastructure
• Other types of Alternative Investments
• Monitoring of investments
• Risk Management of Alternative Investments

Assessment Elements

• Homework and solving problems during seminars
  Students are expected to prepare home assignments. Home assignments are not graded (except for one home assignment) and provide a self-check option for students. One home assignment will be graded. It will be given in the middle of the course and will have a submission deadline. The grades for the home assignment and for the final test have no blocking capacity.
• Class attendance and participation
• Final exam
  The final test will be held on-line in the form of multiple-choice questions using the LMS system

Interim Assessment

• 2023/2024 1st module
  0.1 * Class attendance and participation + 0.6 * Final exam + 0.3 * Homework and solving problems during seminars

Bibliography

Recommended Core Bibliography

• CAIA Association, Donald R. Chambers, Hossein B. Kazemi, & Keith H. Black. (2020). Alternative Investments : An Allocator’s Approach. Wiley.
• D. Capocci. (2013). The Complete Guide to Hedge Funds and Hedge Fund Strategies. Palgrave Macmillan.

Recommended Additional Bibliography

• Bodie, Z., & Merton, R. C. (2012). Finance. Slovenia, Europe: Prentice Hall. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.854D85E7