TThis course provides an overview of alternative investments, including hedge funds, private capital, real estate, natural resources, and infrastructure. Investors often turn to alternative investments for potential diversification benefits and higher returns. As a result, alternative investments now represent meaningful allocations in many institutional and private wealth portfolios. Alternative investments often have a number of characteristics in common. These include lower levels of liquidity, transparency, and disclosure vs. traditional asset classes (equity, fixed income), more complex legal structures, and performance-based compensation arrangements. Students should be able to describe key attributes and considerations in adding these investments to a portfolio. Topics to be covered: • Introduction to Alternative Investments: An overview to Alternative Investments asset class, such as hedge funds, private equity, real estate, commodities and infrastructure investments. We look at each of their distinguishing characteristics, valuation considerations, potential risks and benefits, whilst also comparing the similarities and differences with stocks and bonds. • Hedge Funds: Hedge Funds are not distinct assets; many hedge funds invest in stocks or bonds. What distinguishes hedge funds as an alternative investment is the variety of strategies that they employ. Investing in hedge funds can offer very attractive risk adjusted returns, but expect to pay significant fees for the privilege of doing so (and don’t expect to be able to access your money for a while). • Private Capital: This category includes private equity and private capital. Under private equity, there are two important sub-categories: 1) Buyout funds, which make highly leveraged purchases of established companies, 2) venture capital funds, which provide equity to young companies that have yet to establish themselves in the market. Private debt refers to debt provided to private entities, such as direct lending, mezzanine loans, venture debt and distressed debt. • Natural resources including timberland and farmland. • Real estate: It is possible to own real estate directly, for example as many own their own home or rental properties, or indirect through an investment vehicle such as a real estate investment trust (REIT). • Infrastructure: Investment in long term, capital intensive assets such as roads, schools, highways, sewage system, utilities, hospitals, utilities etc which are for public use and are essential for a country. • Alternative Investments Performance Appraisal and Risk Management Learning Outcomes. a. describe types and categories of alternative investments; b. describe characteristics of direct investment, co-investment, and fund investment methods for alternative investments; c. describe investment and compensation structures commonly used in alternative investments; d. explain investment characteristics of hedge funds; e. explain investment characteristics of private capital; f. explain investment characteristics of natural resources; g. explain investment characteristics of real estate; h. explain investment characteristics of infrastructure; i. describe issues in performance appraisal of alternative investments; j. Calculate and interpret returns of alternative investments on both before-fee and after-fee bases. Students should be prepared in advance by reviewing the power point presentations provided and available on Moodle. These power point presentations in addition to the lecture in class, and assigned readings and research will provide the students with the information needed to understand the subject matters and be prepared for examinations. Examinations and Grading: Students will have to pass two examinations, a midterm and a final exam. The dates of these exams will be announced by the Administration. Attendance will be essential to your grade and your preparation for the exam. All material covered in class will be part of the examination. A research project related to what we learned in class will be part of the grading.

Temps présentiel : 35 heures

Charge de travail étudiant : 20 heures

Méthode(s) d'évaluation : Analyse d'article, Examen final

Référence :
CFA® Program Curriculum 2023 • LEVEL 1 • VOLUME 5- Alternative Investments