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Investing in Hedge Funds, Revised and Updated Edition

ISBN: 978-0-470-88503-1
336 pages
May 2010
Investing in Hedge Funds, Revised and Updated Edition (0470885033) cover image


Hedge funds are in the news and on the minds of sophisticated investors more than ever. Investors have questions about how the funds are structured, where the assets are allocated, and whether hedge funds can truly act as a hedge against market risk. The answers are all here in Investing in Hedge Funds.

Until recently, much of what makes hedge funds tick has been closely guarded--the intellectual property of Wall Street's investment elite. In this updated and revised text, Joseph G. Nicholas, founder and chairman of the leading industry information provider Hedge Fund Research, Inc., travels inside the hedge fund marketplace to explain the alternative investment strategies of top fund managers, providing clear descriptions of how to access these funds and where they're headed. It's a complete guide that everyone investing in hedge funds should study closely.

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Table of Contents


PART I: Keys to Understanding.

CHAPTER 1: What Is a Hedge Fund?

CHAPTER 2: The Hedge Fund Investment Structure.

PART II: Investing with Knowledge.

CHAPTER 3: Hedge Fund Strategies.

CHAPTER 4: Fixed-Income Arbitrage.

CHAPTER 5: Equity Market Neutral.

CHAPTER 6: Convertible Arbitrage.

CHAPTER 7: Merger (Risk) Arbitrage.

CHAPTER 8: Distressed Securities.

CHAPTER 9: Event-Driven Strategies.

CHAPTER 10: Macro Investing.

CHAPTER 11: Sector Funds.

CHAPTER 12: Equity Hedge.

CHAPTER 13: Emerging Markets.

CHAPTER 14: Short Selling.

PART III: Making an Investment.

CHAPTER 15: Investing in Hedge Funds.

CHAPTER 16: After the Initial Allocation.


A. Calculation Methodology.

B. Resources for Investors.

C. Hedge Fund Research Performance Indices.




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Author Information

Joseph G. Nicholas, JD, is founder and chairman of HFR Asset Management, LLC, a leading fund of funds, and Hedge Fund Research, Inc., the industry's leading supplier of hedge fund data. The author of Market-Neutral Investing and Hedge Fund of Funds Investing, he is a frequent lecturer and media expert on topics relating to alternative investments.
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"This book tells all. It explains how [hedge funds] work. This is a serious and important book on the subject and must be read by any serious investor." (Tradersworld magazine)

"Nicholas has done an invaluable service in laying out exactly how hedge funds work, who runs them, how they incorporate, their benefits and risks, and how to go about selecting one." (TheStreet.com)

"I have yet to find a book which does such a good job of demystifying an area which has been kept deliberately opaque (with good reason) by its players." (AIMA (Alternative Investment Management Association) Newsletter)

"In light of the dramatic increase of investments in hedge funds, the recent media attention, and the widespread need to better understand these complex strategies, Joe Nicholas has created a key investor guide to hedge funds, including the unique and valuable perspective of having top hedge fund managers describe what they do in their own words."
—Timothy J. Leach
Chief Investment Officer, U.S. Trust Corp.

"Investing in Hedge Funds is the first comprehensive study of what hedge funds are and how they work. This is an essential book for all investors curious about alternative investment strategies. Joseph Nicholas details the range of investment strategies pursued by hedge fund managers and writes in a clear, lucid style. I highly recommend this book to academics and professionals who want to learn about hedge funds."
—Professor William N. Goetzmann
Director, International Center for Finance, Yale School of Management

"Joseph Nicholas provides an extraordinary analysis of hedge funds that clearly explains what they are and how they work. This book is a must-read for anyone looking to reduce investment risks and increase performance."
—William B. Nicholson
Chairman and Chief Executive Officer, Capital Resource Advisors

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