Japan hedge fund
Moderate volatility hedge fund strategies
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by Venture Japan
3. moderate volatility hedge fund strategies
Continuing from the previous section on low volatility hedge fund strategies, the most common moderate volatility hedge fund strategies are:
- Special Situations hedge fund: The hedge fund manager invests in companies which are involved in mergers, hostile takeovers, reorganizations, leveraged buyouts etc. The special situations hedge fund manager may often take positions in both the company being acquired and its acquirer and may also use derivatives to leverage returns and hedge against interest rate and market risks. The performance of the special situations hedge fund is usually not correlated to the bond and equity markets.
- Opportunistic hedge fund: The hedge fund manager changes his/her specific investment strategy as opportunities arise to profit from IPOs, rapid price changes resulting from earnings or other news, hostile bids, and other such event-driven opportunities. The opportunistic hedge fund manager will often use several event-driven investing styles simultaneously as he/she is not restricted to any one investment approach or asset class.
- Multi Strategy hedge fund: The hedge fund manager simultaneously uses various strategies, including systems trading such as trend following and other technical strategies, to realize short-term and long-term gains. This investing style allows the hedge fund manager to overweight or underweight different strategies and best capitalize on present investment opportunities.
4. high volatility hedge fund strategies >>
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