What Hedge Funds Really Do: An Introduction to Portfolio Management



This book draws the curtain back on the core building blocks of many hedge fund strategies.

What do hedge funds really do? These lightly regulated funds continually innovate new investing and trading strategies to take advantage of temporary mispricing of assets (when their market price deviates from their intrinsic value). These techniques are shrouded in mystery, which permits hedge fund managers to charge exceptionally high fees. While the details of each fund’s approach are carefully guarded trade secrets, this book draws the curtain back on the core building blocks of many hedge fund strategies.

As an instructional text, it will assist two types of students:

  • Economics and finance students interested in understanding what “quants” do, and
  • Software specialists interested in applying their skills to programming trading systems.

What Hedge Funds Really Do provides a needed complement to journalistic accounts of the hedge fund industry, to deepen the understanding of nonspecialist readers such as policy makers, journalists, and individual investors.

The book is organized in modules to allow different readers to focus on the elements of this topic that most interest them. Its authors are a fund practitioner and a computer scientist (Balch), in collaboration with a public policy economist and finance academic (Romero).


About the Author(s)

Philip J. Romero

Dr. Philip J. Romero is an economist, policy analyst, and applied mathematician. Romero has been a professor of business administration at the University of Oregon’s Lundquist College of Business sinc…

Tucker Balch

Tucker Balch is a former F-15 pilot, professor of Interactive Computing at Georgia Tech, and co-founder of Lucena Research, Inc., an investment research firm. Dr. Balch was one of the first to bring …

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Pub Date

August 29, 2014





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