Hedge Funds case studies, worked step by step

Cases
100
Traced to a firm
31
Topics
13
Hard
30
Topic
All topicsCredit, distressed and capital structure7Earnings, models and KPIs8Event-driven and merger arbitrage7Fund economics, NAV and LP decisions8Global macro trades7Long pitches and valuation14Manager evaluation and attribution7Pairs and relative value5Portfolio construction and sizing7Risk limits and drawdowns7Short selling6Systematic research and data11Volatility, options and convertibles6
Level
AnyWarm upCoreHard
Source
AnyReported at a firmStandard
Showing 1–10 of 100
  1. 001Jortan Pharma's loan caps net debt at 3.5x EBITDA. EBITDA falls 20% from Rs 500 crore to Rs 400 crore while net debt stays at Rs 1,600 crore. Is the covenant breached, and how much equity would cure it?Credit, distressed and capital structureWarm upCredit and distressed funds
  2. 002Tunevi Music adds 10,000 subscribers a month and loses 5% of its base each month, at Rs 120 per subscriber a month. What are the steady-state base and revenue run rate, and how long does it take to get halfway there?Earnings, models and KPIsCoreLong-short equity fundsMulti-manager platforms
  3. 003Orvian Tech will join a major index. Passive funds need to buy 3 crore shares, and the stock trades 20 lakh shares a day. How do you think about the price pressure and the timing of the trade?Event-driven and merger arbitrageCoreEvent-driven fundsMulti-manager platforms
  4. 004Varsana Asset Management runs Rs 5,000 crore at 1.5 and 15, with Rs 60 crore of annual costs. What does the manager earn at gross returns of 0%, 10% and 20%, and at what AUM does it break even in a flat year?Fund economics, NAV and LP decisionsCoreFund of funds and allocators
  5. 005Anvika Family Office invests USD 10 million in a US fund expected to return 8% in dollars. It is told that hedging the dollar back to rupees through forwards costs 3% a year. When is hedging worth it, and what is the unhedged return if the rupee weakens 4%?Global macro tradesWarm upGlobal macro funds
  6. 006Harvel Paints has revenue of Rs 2,400 crore and a 12% EBIT margin, with crude-linked raw materials at 55% of revenue. Your thesis is that raw material prices fall 10% and Harvel keeps half the saving. What happens to EBIT, and how much must it keep for a 15% upgrade?Long pitches and valuationWarm upMillennium ManagementNew York · 2024
  7. 007Pellora Long-Short Fund returned 9% in a year when the market returned 15%. Its average beta was 0.4 and cash earned 6%. Did it underperform?Manager evaluation and attributionWarm upFund of funds and allocatorsMulti-manager platforms
  8. 008Voltarra Power's ordinary shares trade at Rs 200 and its differential voting rights shares at Rs 110, with the same claim on profits and a slightly higher dividend. Why might the gap persist, and what would make a long DVR, short ordinary trade work?Pairs and relative valueCoreLong-short equity fundsMulti-manager platforms
  9. 009A Nesavu Capital pod has three ideas with volatilities of 20%, 35% and 50%. The PM wants each to contribute the same risk, assuming low correlation between them. How should capital be split, and how does that differ from equal weights?Portfolio construction and sizingCoreMulti-manager platformsLong-short equity funds
  10. 010A Selvik Quant strategy earns gross alpha of 8% a year but turns over its book 20 times a year at 15 basis points a side. Halving turnover would cut gross alpha to 6%. Which version is better after costs?Risk limits and drawdownsWarm upMan GroupBoston · 2022

Company names and figures are illustrative.