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 1–5 of 5 · filtered from 100Clear filters
  1. 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
  2. 033Two private banks, Sarvodh and Nimbal, usually trade 1.2x apart on price to book, with a standard deviation of 0.2x. Today the gap is 1.6x and the spread's half-life is about 60 days. Analyse the trade: entry, sizing, stop and what you expect to make.Pairs and relative valueCoreLong-short equity fundsMulti-manager platforms
  3. 058Ravira Holdings owns 40% of listed Ravira Motors, worth Rs 20,000 crore in total, has net debt of Rs 500 crore and no other assets, and a market value of Rs 5,000 crore. What is the holding company discount, and how would you trade it?Pairs and relative valueWarm upLong-short equity fundsMulti-manager platforms
  4. 070In quick delivery, Swiftora's share is heading from 45% to 55% with contribution margin up 3 points, while Kartlo's falls from 30% to 20% with margin down 5 points. Build the long Swiftora, short Kartlo pair: sizing, what it earns if the thesis plays out, and what happens if the whole sector falls 20%.Pairs and relative valueHardCoatue ManagementNew York · 2014
  5. 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

Company names and figures are illustrative.