Hedge Fund and Investment Industry - Literature review Example

Hedge Fund and Investment Industry Experience & Academic Background for Doctoral Study Doctoral study has always been considered as a prestigious qualification, that requires at least 16 years of qualification, which involves school, college and university education. The requirement of different PhD programs may vary from one program to another and from one university to another university. Not many people in the world reach the level of doctoral study. The doctoral study like PhD program requires in-depth research work on the area under study. Therefore, the qualification up to the graduation level can help the students to develop acumen cognizant regarding the basic concepts of the area of interest. The reasons that generally compel people to go for a doctoral program include the urge to achieve something significant, to learn something new, improve life and one’s self, and last but not the least it suits one’s personality (Bentley, 2006). One of the most important thing that needs to be considered for the PhD program is that the candidate should have the knowledge how to conduct research and how to maintain scholarly language. Therefore, completion of 16 years of education along with the Masters program can help me to be the suitable candidate for the doctoral study. Another important consideration is that the candidate for doctoral program must have the pragmatic knowledge of the market so the research may have more accurate results. Therefore, the ideal candidate for the PhD program must have the experience of the market, which may be achieved with the help of the practical market exposure. My area of interest is hedge fund investments and after graduation from the university and relevant experience in the field of hedge fund management can make me an ideal candidate for doctoral study Specific Area of Interest--- Relationship between Career Objectives and Research As already mentioned above my area of interest is the Hedge Fund Investments. Hedge Funds are those funds in which the investments are normally made in highly risky funds. It is one of the most aggressively managed portfolios. The investment strategies used for hedge fund management activities include leveraged long, short and derivative positions. The remuneration package for the hedge fund manager, whether as an employee or as an independent fund manager, is normally very high. In addition to this, the hedge fund managers require in depth insider business knowledge for the whole portfolio under consideration. Therefore, the field of hedge fund management requires in-depth research work. One of the most important thing that needs to be considered is that one should understand how the hedge fund management activities can be performed. The reason is that it requires thorough understanding of the technical, as well as, analytical tools such as financial modelling, financial engineering, technical knowledge of fund management, linkage between the financial news and relevant financial indicators or regression or statistical analysis tools etc. All of the tools, which are mentioned above are considered as the basic requirements of hedge fund management activities. Therefore, conducting research in the field of hedge fund management has always been an integral part to build career in finance. Moreover, developing the cognizant regarding the basic requirements of finance can help me in achieving a competitive advantage in getting into the field of hedge fund management. Research Based Articles on Hedge Funds Management Article1: Emerging Market Sovereign Debt Funds The Research based article by McIntosh (2012) indicates that the Adelante Emerging Market Debt Fund, which is focused on the returns based on emerging markets. The fund, which is based on emerging markets is relatively an unusual strategy and can be established only in the hedge funds. Theoretical Relevance to Hedge Funds Research The article gives knowledge regarding how hedge fund strategies can be established and how the returns are designed. Moreover, the article can help in identifying the innovative and highly risky strategy, which can guide the reader regarding the hedge fund management strategies. Methodological Relevance to Hedge Fund Research The research methodology followed by the research based article is quite exploratory in nature. There are no hard and fast rules that need to follow for managing the hedge funds. Therefore, the research work on hedge fund management can help in identifying the new horizons for further research on the topic area under study. Relationship between selected article and the research on hedge fund investments The Research article, which is based on Adelente Emerging Market debt Fund, identifies the fund management activities in the area of Hedge funds. In addition to this, the article is clearly focused on identifying the financial fundamentals of emerging markets along with the comparison with the financial fundamentals of developed markets. Therefore, the article is directly related to identifying the hedge fund management strategies, which is my area of interest for research. Strengths & Weaknesses The Strength of this article is that the researcher has very minutely studied the comparison of financial indicators between emerging markets and developed markets. The weakness of this article is that it has missed some other factors, such as the sustainability of the developed markets. Article 2: Institutional Investor’s Sentiments The second research based article by Morgan Brokerge (2012) identifies the link between the institutional investor sentiments due to the market movements and the hedge Funds Strategies. Theoretical Relevance to Hedge Funds Research The article identifies the fact that the investors try to navigate uncertainty across global market in search of outperformance of funds. The article can help in understanding the link between the markets and the hedge fund performance research. Methodological Relevance to Hedge Fund Research The article has explored the market research. The regression analysis can be more useful and reliable method that can be used to generate the link between the independent and dependent variables, but the relationship between the two variables can be studied using the correlation analysis. The article clearly indicates that the statistical tools cannot directly work for hedge funds because of high risky and uncertain portfolios. This can help in designing the research methodology for hedge funds. Relationship between selected article and the Research on Hedge Fund Investments The article is also focused on the global presence of hedge fund management activities. The creation of comprehensive global product for hedge funds along with the hedge fund research centres can help in identifying the importance of research on hedge fund Investments. Strengths & Weaknesses The strength of the article is that the article has clearly justified the importance of hedge fund research by globalizing the hedge fund market but the weakness is that the article omitted the fact that the high risky environment for hedge funds can make the hedge fund establishment more cumbersome in the international market. Article 3: Robust Assessment Of Hedge Funds Performance The third article by Almeida & Garcia (2012) assesses the current performance of hedge funds. There are different indicators that can help in identifying the performance of hedge funds Theoretical Relevance to Hedge Funds Research The article identifies the fact that the investment strategies of hedge funds are very diverse. It is very hard to identify the accurate level of risk. Therefore, the research has theoretically mentioned that while conducting hedge funds research, it is difficult to identify the risk factors Methodological Relevance to Hedge Fund Research The article follows the statistical method in identifying the risk level and proves that the statistical tools cannot directly work for funds with highly long short positions along with the derivatives market. Therefore, the article supports the fact that the research methodology for hedge fund research should also incorporate the subjective factors. Relationship between selected article and the Research on Hedge Fund Investments The article is totally related to hedge funds research. The article clearly identifies the fact how to conduct research on hedge funds investments. Moreover, what are those factors that should be considered when making hedge fund investments? Strengths & Weaknesses The article is strongly representative of actual hedge fund performance. The weakness lies in the fact that the article is based on run time research, which may not be true indication of the facts. Article 4: Hedge Funds Past Present & Futures The fourth article by Stulz René (2007) indicates the hedge funds performance trend along with the projections. Theoretical Relevance to Hedge Funds Research The article is totally related to the trend analysis of hedge funds performance from the economics perspective. Theoretically, the article identifies the economic indicators that are impacted by the hedge funds performance. Methodological Relevance to Hedge Fund Research The article focuses on the correlation analysis between the hedge funds performance and the economic indicators. The hedge funds management is a diversified portfolio that can help in identifying the hedge funds performance based on the varied risk analysis. The same methodology was followed by the researcher in the article. Relationship between selected article and the Research on Hedge Fund Investments The article identifies the fact that the hedge funds investments are largely based on unregulated market. Therefore, in conducting the hedge fund research it is important to identify those funds which can survive in unregulated market with abnormally high returns. Strengths & Weaknesses The strength of the research based article is that it can help the reader to clearly bifurcate the mutual funds and the hedge funds. The weakness lies in the point that the hedge fund if passively managed can easily be considered as equivalent to mutual funds, which may not be easily bifurcated to study. My Future Career Goals My area of interest is hedge fund management. In today’s world, the world of finance is considered as one of those fields, which has vast exposure in the international market. The international financial market requires those financial experts, who have technical, as well as, specialized expertise in the area of finance. Financial world has been bifurcated into different categories, which require different level of expertise. One of the most prestigious and worthy category of finance is the fund management. Therefore, after achieving the qualification up to the graduation level and experiencing the fund management activities I can surely be the ideal candidate for the doctoral study. My Future Career goal is to become the hedge funds investment manager, Hedge fund CFO or to start my own fund. The reason for selecting the hedge fund management is that it is unusual category of managing the fund management. There are very few people who work in this area of funds. The reason, for the less financial experts to be involved in this field of fund management, is that it is highly risky and does not have any hard and fast rule to follow for fund management activities. Therefore, the star hedge fund performers can spend an extremely luxurious life if they have the grip and control over the analytical tools. Another important reason for selecting this field as my career goal is that the Hedge Fund Managers normally have extraordinary high technical, as well as, financial expertise. The development of high expertise makes one person highly competent and can have high encashment value for his/ her services. References Almeida, C., & Garcia, R. (2012). Nonparametric discounting, a robust assessment of hedge fund performance. The Hedge Funds Journal, Retrieved from http://www.thehedgefundjournal.com/node/7598 Bentley, P. (2006). The PhD application handbook. Berkshire: McGraw-Hill International McIntosh, B. (2012). Adelante asset management, playing emerging market sovereign debt to generate returns. The Hedge Funds Journal, Retrieved from http://www.thehedgefundjournal.com/node/7595 Morgan Brokerge, J. P. (2012). Institutional investor sentiment, J.P. Morgan prime brokerage global hedge fund trends. The Hedge Funds Journal, Retrieved from http://www.thehedgefundjournal.com/node/7590 Stulz, R. M. (2007). Hedge funds: Past, present, and future. Journal of Economic Perspectives, 21(2): 175–194. Read More