In the wake of 2008, investors are now painfully aware of tail risk – the risk of unexpectedly large losses. Today many institutional investors are insuring against tail risk directly, often by purchasing puts or structuring collars. Unfortunately, experience and financial theory suggest that the long-term cost of such insurance strategies will be larger than the payouts. No surprise, really. The expected return for perpetual insurance buyers is negative, and conversely positive for insurance sellers (see: the entire insurance industry).

This paper studies how covenants are included in contracts between venture capitalists (VCs) and entrepreneurs. I show that VCs hold covenanted veto rights even though they are shareholders who have access to other powerful governance solutions. Unlike bank loans and bonds, venture capital (VC) contracts exhibit considerable variance in their contractual designs. I exploit the variation to confirm the argument that covenants are in place to overcome a conflict of interest that arises from debt-like contractual features of a venture capitalist’s preferred stock.

The first decade of the 21st century has perhaps witnessed more structural change in commodity futures markets than all previous decades combined. Not only have trading volumes and open interest increased markedly, but this time period also saw historic changes in both trading and participants. The available literature indicates that the irrational and harmful impacts of the structural changes in commodity futures markets over the last decade have been minimal. In particular, there is little evidence that passive index investment caused a massive bubble in commodity futures prices.

Investors tend to think of expected returns as a function of asset class risk, but this thinking may have led them to take on too much equity risk. For behavioral reasons, diversifying across investment styles, such as blending momentum and value, may offer greater returns for less risk. Limited market timing may also increase returns.

The ’40 Act alternatives market has recently become one of the most widely talked-about new developments for the Hedge Fund (HF) industry. Interest in these products comes at a time when the growth of assets in the HF industry has slowed, leading some observers to conclude that the HF industry has become a mature, slow-growth industry.

During the past decade, the inability of traditional stock and bond portfolios to satisfy investor needs led to an evolution of the investment management industry. Investors began to search for other sources of diversification,encouraging asset managers to think about new products and ideas.

This article analyzes UCITS hedge funds, the EU-regulated investment vehicles also called Newcits or alternative UCITS. Because this regulatory regime allows for a relatively large degree of latitude, the funds are potentially attractive to hedge-fund managers. In parallel, investors are pushing for more regulations in the alternative space. This helps to explain why more and more hedge-fund managers are now offering on-shore alternative products, or alternative UCITS.