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 51–60 of 69 · filtered from 100Clear filters
  1. 072You want to short Pravit Gaming at Rs 500. Borrow costs 12% a year. You think there is a 60% chance it falls to Rs 350 within a year and a 40% chance it rises to Rs 700. Is the short worth doing, and what borrow cost would make it work?Short sellingHardLong-short equity funds
  2. 074Kalvora Cement has 20 mtpa of capacity at 70% utilisation, EBITDA of Rs 900 a tonne and an EV of Rs 9,000 crore. Management plans a 5 mtpa expansion costing Rs 6,000 crore. The stock looks cheap against replacement cost of Rs 1,200 crore per mtpa. Is it, and does the expansion create value?Long pitches and valuationHardLong-short equity fundsMulti-manager platforms
  3. 076Brellin Textiles is restructuring with an enterprise value of Rs 900 crore, Rs 600 crore of secured debt and Rs 500 crore of unsecured bonds trading at 35. What does each class recover, which is the fulcrum, and what is the upside in the bonds?Credit, distressed and capital structureCoreCredit and distressed funds
  4. 078Samvara Telecom announces a rights issue of 1 new share for every 4 held at Rs 60, with the stock at Rs 100. What is the theoretical ex-rights price, what is each right worth, and what should a holder who does not want to invest do?Event-driven and merger arbitrageWarm upEvent-driven fundsMulti-manager platforms
  5. 082An analyst at Tavish Capital made 40 trades: 18 winners averaging Rs 1.8 crore and 22 losers averaging Rs 1.0 crore. What is the hit rate, the expectancy per trade, and what would you tell the analyst?Manager evaluation and attributionWarm upFund of funds and allocatorsMulti-manager platforms
  6. 083You are long Rs 10 crore of Menvik Steel (beta 1.3) and short Rs 10 crore of Irvanta Steel (beta 0.9). The market falls 10% and both stocks move exactly with their betas. What is your P&L, and how should you have sized the short?Pairs and relative valueWarm upLong-short equity fundsMulti-manager platforms
  7. 084Tamsin Equity's book has a momentum factor exposure of 0.4. A momentum reversal of minus 15% hits the factor in a week. What does the book lose, and how would you hedge the exposure without selling your best ideas?Portfolio construction and sizingCoreMulti-manager platformsLong-short equity funds
  8. 085Pallav Multi-Strategy Fund can buy a put spread costing 1.5% of NAV a year that pays 12% of NAV if the market falls 25%. You think such a crash happens once in eight years. Is the hedge worth buying?Risk limits and drawdownsCoreMulti-manager platforms
  9. 086Quickrin Finance, an online lender, earns a 48% yield on a Rs 5,000 crore loan book, with funding costs of 12%, credit costs of 10% and operating costs of 14%. A proposed rule would cap lending rates at 36%. What happens to its pre-tax ROA, and how would you frame the short?Short sellingCoreLong-short equity funds
  10. 087Open-ended: would monsoon rainfall help predict quarterly sales for Bhumora Agro and four other farm-input makers? You have 15 years of district rainfall and quarterly sales. How would you build and test the signal, and how many independent observations do you really have?Systematic research and dataCoreQuant and systematic funds

Company names and figures are illustrative.