Alternative Investment Management Software

Biases in fund databases present another serious problem originated from the following reasons. First, databases include only a part of the whole hedge find population that varies from 30 percent to 50 percent. Second, some biases are derived from the peculiar terms of counting hedge funds and their respective returns.

The hardest aspect about hedge fund properties is to understand that they present an entirely distinct category of financial instruments, therefore, deploying a traditional methodology commonly used for stocks and bonds, will lead to the unexpected and most questionable results.

Low transparency of hedge funds is often viewed as a key risk factor of alternative investments, while the term transparency is referred to fund asset allocations. Such a standpoint ignores the fact that the degree of investment risks depends on the way of structuring assets in the portfolio, rather than on assets themselves.

There are two distinct trends in finance software applications: tools designed to provide a deep insight into the matter and products aimed to make impressions. The latter dominate the industry, thus opening an apparently naive question - why do investors need analytical tools and applications at all?

The unique hedge fund risk assessment problems arising from numerous causes like non-normality of their distributions of returns, bizarre hedge fund indices and data biases are not new. One may easily find hundreds of articles and deep researches on the subject as well as a few proven investment frameworks offering feasible solutions by enhancing the commonly used risk metrics.

Typical mistakes in hedge fund valuation and risk assessment arise from neglecting their unique properties: non-normal return distributions, low transparency, bizzarre hedge fund indices, inapplicability of the mean-variance methodology, numerous data biases etc. The distinct hedge fund valuation and risk management problems can be outlined as follows...

The Markowitz’s mean-variance methodology is hardly applicable for hedge fund risk assessment. Since its introduction, the mean-variance methodology became the primary tool for portfolio diversification used by the majority of pension and mutual funds globally. However, despite its popularity, the mean-variance approach suffers important drawbacks...

Based on the Markowitz’s mean-variance model, the Capital Asset Pricing Model (CAPM) inherits all the shortcomings of the latter in addition to its own assumptions that makes it hardly applicable for hedge funds and non-linear assets. While the CAPM still emerges as the most commonly used approach for both institutional and private investors, using it for hedge funds could be disastrous.

Is the Sortino Ratio an effective comparative risk measure? Explore its nuances, advantages, and limitations in our latest article. Discover insights from a comprehensive study and learn about Risk Shell's innovative FlexiRank framework, offering a nuanced approach to asset comparison.

Is Dubai witnessing a notable surge in hedge funds relocating or establishing their base in the region? What are the best hedge funds operating in Dubai? How do these hedge funds stack up against their peers in the emerging market strategies? Let's find out.

Are crypto assets in a financial bubble? Can investment risks associated with crypto funds be managed and reduced? Is it possible to determine the intrinsic value of crypto assets? Let's delve into these questions and uncover the answers.

Value at Risk (VaR) is widely used but has key limitations, including sensitivity to estimation methods, lack of coherent risk aggregation, and inability to capture extreme tail losses. These issues have motivated alternatives such as Conditional Value at Risk (CVaR).