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FM230: Alternative Investments

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Course Content

In an era of significant market turmoil that is institutional as well as individual, investors look beyond traditional investment vehicles such as bonds and shares.

The purpose of this course is to explore the world of alternative investments, such as hedge funds, private equity / venture capital funds, real estate, and commodities either directly or through funds of funds. A substantial increase in the price of gold over the last five years is just one example of a successful alternative investment at work.

Course topics will include:

  • Overview of Alternative Assets
  • Hedge Funds
    • A Hedge Fund Investment Program
    • Due Diligence
    • Risk Management
    • Regulation
    • Funds of Funds
  • Commodities and Managed Futures
    • Investing in Commodity Futures
    • Managed Futures
  • Venture Capital (VC)
    • Raising Funds
    • Valuation of Investments
    • Initial Public Offerings (IPOs)
  • Leveraged Buyouts (LBOs)
    • Financing and Leverage
    • LBO valuation
    • Value Added
    • Exit Strategies
  • Real Estate
    • Real Estate and an Investment Asset
    • Valuation
    • Securitisation and Mortgage Backed Securities (MBSs)
    • Real Estate Investment Trusts (REITs)
    • Demographics

There will also be guest lectures by practitioners from the hedge fund and private equity industries.

The course will combine theory with empirical exercises, allowing students to get a hands-on experience. We want to identify what the return-risk characteristics of alternative investments are, what attributes to their appeal, how to understand related technical publications, and how to construct a portfolio using them.

As part of class work, students will be encouraged to work with data (in Excel). Particular data work will include measuring the risks of investment portfolios, calculating the alphas of hedge fund strategies, evaluating an LBO deal, evaluating a VC deal and pricing an MBS.

World-class LSE teaching

The LSE’s Department of Finance has grown in recent years to become one of the largest and most highly-regarded finance groups in the UK and Europe. On this three week intensive programme, you will engage with and learn from full-time lecturers from the LSE’s finance faculty. FM230 course lecturers, Dr Hongda Zhong and Dr Andrea Tamoni, teach on a number of our undergraduate and graduate Finance modules, including Principles of Finance, and Fixed Income Securities and Credit Markets.


Texts*

"Handbook of Alternative Assets", by Mark J. P. Anson, John Wiley & Sons (2006).

*A more detailed reading list will be supplied prior to the start of the programme

**Course content, faculty and dates may be subject to change without prior notice

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KEY FACTS

Session: One

Dates: 19 June - 7 July 2017 

Lecturers:
Dr Hongda Zhong
Dr Andrea Tamoni


Session: Three

Dates: 31 July - 18 August 2017

Lecturers: 
Dr Hongda Zhong
Dr Andrea Tamoni 

(Due to popularity, this course is repeated and can be taken in either of the sessions outlined above.)


Level: 200 level

Fees: Click here for information

Prerequisites: Basic mathematics, and statistics. Introductory Finance (to the level of FM250). Introductory Microeconomics (to the level of EC101).

Lectures: 36 hours 

Classes: 18 hours

Assessment*: Two written examinations

Typical credit**: 3-4 credits (US)
7.5 ECTS points (EU)


How to apply?

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*assessment is optional – see FAQs

**You will need to check with your home institution. Read more about credit transfer here.