With the increased scrutiny of risk management in hedge funds, intensifying regulatory requirements to operate them, and mounting market pressures, it has become clear to everyone in this field—from risk managers and regulators to traders and investors—that in order to achieve continued success, the internal operations and transparency of hedge funds as a whole must be improved upon.

Throughout her career at various financial institutions, author Armelle Guizot has seen firsthand how risk management and compliance structures have worked for different financial instruments. But when it came to hedge funds, she quickly realized that risk management had only been performed on the surface and was applied superficially, primarily as a marketing sweetener, not for true risk management purposes.

Now, with The Hedge Fund Compliance and Risk Management Guide, Guizot looks to bring more transparency to this topic, by providing you with a broad examination of the most important compliance and risk management issues associated with today’s hedge funds. Straightforward and accessible, this invaluable resource covers everything from how hedge funds continue to generate lucrative returns to why some use sophisticated instruments and financial engineering to get around fundamental regulatory laws. Along the way, through real-world examples, Guizot proves—on a quantitative and qualitative level—just how integrated hedge funds are in today’s markets, and she offers practical advice on how you can deal with this reality.

This book also discusses many other issues with regard to hedge fund compliance and risk management, including:

• Different hedge fund strategies—from global macro to relative value arbitrage—and their performance history
• Types of hedge fund risk—from pricing and leverage risk to liquidity, credit, and operational risk
• Basic risk management standards and recommendations—from VaR and stress testing to scenario analysis and omega
• Methods and models used to detect hedge fund fraud
• And much more

The applications of regulation and risk taking are balancing acts, which keep returns healthy and contribute to stable financial markets and global economies. With The Hedge Fund Compliance and Risk Management Guide, you’ll discover exactly why this is true and learn how you can hone your skills to make better decisions in the dynamic world of hedge funds.

Praise for The Hedge Fund Compliance and Risk Management Guide

“This book touches all areas of compliance and risk management. For everyone interested in starting a hedge fund or learning more about risk and compliance, search no more, all you need to know about compliance and risk is in this guide. This is the long-awaited book that every hedge fund manager, fund of hedge fund manager, lawyer, accountant, and investment bank’s compliance department has been waiting for. A wealth of information.”
—Dr. Greg N. Gregoriou, Associate Professor of Finance, State University of New York (Plattsburgh) and coeditor of Hedge Funds: Strategies, Risk Assessment, and Returns

With hedge funds becoming a more integral part of today’s financial markets, the issues of compliance and risk management with regard to this instrument—and the industry—are beginning to be seriously addressed.

Through her experiences with several hedge funds, risk management expert Armelle Guizot has firsthand knowledge of the policies and philosophies that have long been a part of this industry. With The Hedge Fund Compliance and Risk Management Guide, Guizot looks to bring more transparency to this topic, by providing you with a broad examination of the most important regulatory and risk management issues associated with today’s hedge funds.

Covering everything from valuation and capital rating methodologies to specific trading strategies, theories, and models, The Hedge Fund Compliance and Risk Management Guide is a valuable resource for anyone involved in or affected by this industry.

Filled with in-depth insights, practical advice, and real-world examples, The Hedge Fund Compliance and Risk Management Guide provides you with the information you need to understand this dynamic market.