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 21–30 of 100
  1. 021Kovil Realty's promoters own 55% and have pledged 70% of that stake. Lenders call for more collateral if the stock falls 30% and start selling at a 40% fall. The free float is 45% and daily volume is 0.3% of shares. Build the short thesis and the risk to it.Short sellingHardLong-short equity funds
  2. 022In a timed data exercise you get 5,000 stock-days with 40 features and must build a predictor of next-day returns. Your model has an in-sample R-squared of 4% and an out-of-sample R-squared of 0.5%. What happened, how do you present it to the researcher, and what would you try next?Systematic research and dataHardSquarepoint CapitalParis · 2025Squarepoint CapitalParis · 2025
  3. 023Voltrail Charging wants to justify a valuation of Rs 3,000 crore. Size its market: 20 lakh electric cars in its region, 30% of charging done at public stations, 2,000 kWh charged per car a year and a margin of Rs 4 per kWh. What EBITDA pool exists, and what share must Voltrail win?Long pitches and valuationCoreLong-short equity fundsMulti-manager platforms
  4. 024The Morlen momentum strategy was tuned over 200 combinations of look-back and holding period. The best has a backtest Sharpe ratio of 1.8 over five years. How much of that should you believe, and what test would you run before allocating?Systematic research and dataHardQuant and systematic funds
  5. 025Ambrel General Insurance writes Rs 8,000 crore of premium at a combined ratio of 104%, holds invested assets of Rs 10,000 crore earning 7%, has Rs 4,000 crore of equity and a 25% tax rate. The stock trades at 2.5x book. What ROE does it earn, what does the price imply, and what would change your view?Long pitches and valuationHardLong-short equity fundsMulti-manager platforms
  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. 028Stellan Pharma offers 0.5 of its shares for each Moravi Labs share. Stellan trades at Rs 800 and Moravi at Rs 370, and Moravi would fall to Rs 280 if the deal broke. What is the spread, how do you hedge it, and what completion chance is the market pricing?Event-driven and merger arbitrageCoreAQR Capital ManagementGreenwich · 2021
  9. 029Build the month-end NAV for Ovelle Partners from gross assets of Rs 1,050 crore, a prime broker loan, accrued fees and redemptions payable, with 9.9 crore units in issue. What is the NAV per unit?Fund economics, NAV and LP decisionsCoreMan GroupBoston · 2019
  10. 030Pelagia imports oil worth 4% of GDP and runs a current account deficit of 2% of GDP. Oil prices rise 30%. What happens to the deficit, the currency and the rates market, and what trade would you put on?Global macro tradesCoreGlobal macro funds

Company names and figures are illustrative.