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 20 · filtered from 100Clear filters
  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. 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
  3. 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
  4. 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
  5. 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
  6. 026Vishrant Finance's one-year commercial paper yields 11% while AAA paper of the same term yields 8%. With a 30% recovery in default, what default probability makes you indifferent between them, and how do you use that number?Credit, distressed and capital structureWarm upCredit and distressed funds
  7. 027Castrelle Fashion reports revenue growth of 18%. New stores add 12 points, same-store footfall is down 2% and the average bill is up 8%. Break the growth down and say what it tells you about demand.Earnings, models and KPIsWarm upLong-short equity fundsMulti-manager platforms
  8. 031Oskari Auto Components trades at Rs 420. Your one-week case gives a bear value of Rs 300 (30% chance), a base of Rs 480 (50%) and a bull of Rs 650 (20%). What is the probability-weighted value, what is the skew, and is this a long you size up or down?Long pitches and valuationWarm upLong-short equity fundsMulti-manager platforms
  9. 034Kithara Long-Short Fund runs Rs 105 crore of longs with an average beta of 1.1 and Rs 95 crore of shorts with an average beta of 1.3, on Rs 100 crore of capital. What are its gross, net and beta-adjusted net exposures, and what happens if the market falls 10%?Portfolio construction and sizingWarm upMulti-manager platformsLong-short equity funds
  10. 038A family holds a large stake in Jharna Textiles at Rs 400. A one-year put at Rs 360 costs Rs 20, and a one-year call at Rs 460 can be sold for Rs 20. Compare protecting the stake with the put alone and with a zero-cost collar.Volatility, options and convertiblesWarm upVolatility and relative value funds

Company names and figures are illustrative.