Rogers terms Flashcards
(131 cards)
1
Q
40 act fund
A
A fund registered under the 1940 investment company act that provides transparency, regulatory oversight, and investor protection such as mutual funds and ETFs
2
Q
Abenomics
A
Implemented by Abe in 2012. 3 Pillars: Monetary Easing, boosting gov spending, and reforms to make Japan more competitive.
Results? Some periods of success but failure to maintain 2% inflation target, long term success in question
3
Q
Active / Index management
A
Active tries to outperform the index and managers are pick stocks and timing whereas index tries to emulate market
4
Q
Activist
A
An investor who buys stakes in companies to try to change how they’re run i.e. give more dividends, improve operations
5
Q
ADV
A
A document required for investment advisors that details their business practices, fees, disciplinary history. They need it to register with regulatory agencies
6
Q
Alpha
A
Measure of performance relative to market
7
Q
Angel investors
A
Rich private investors who use their own money to invest in small companies
8
Q
Anti-Dilution
A
Clauses that allow investors to maintain their ownership percentage when new shares are issued
9
Q
Arbitrage
A
Buying a security and then selling it in another market for a higher price, allowing you to take advantage of momentary differences in markets
10
Q
AUA
A
Assets Under Administration: you can only advice on the assets
11
Q
AUM
A
Assets Under Management: you can actually trade the assets
12
Q
Back Office
A
Admin and support personnel, not client-facing i.e. IT, regulatory
13
Q
Basis risk
A
The potential risk that arises from mismatches in a hedged position.
14
Q
Benchmark
A
A standard or measure used to analyze risk and return of a portfolio
15
Q
Beta
A
Measures the relative volatility of an investment and is an indication of relative risk
16
Q
Black Swan
A
A really bad event that is impossible to predict
17
Q
Bps (Basis Points)
A
unit of measure to describe the percentage change in value of a financial instrument
18
Q
Burn
A
Rate at which a company spends its cash over time
19
Q
CAGR (Compound Annual Growth Rate)
A
Annualized average rate of growth of revenue between two given years
20
Q
Cap Table
A
A document that shows who has ownership of a company. Includes a list of all securities, stocks etc
21
Q
Capital Introduction
A
Describes the introductions that a prime brokerage firm makes on behalf of its money managers by introducing hedge fund clients to hedge fund investors
22
Q
Carry/ Carried interest
A
Share of profits paid by PE, VC or Hedge Fund paid as incentive to compensation to the fund’s general partner
23
Q
Catch Up
A
Takes effect when an investors returns reach the defined hurdle rate, giving them an agreed level of preferred return
24
Q
CB (Convertible Bond)
A
A debt instrument that can be converted into a predetermined number of common stock or equity shares
25
CB-Arb
Strategy that aims to capitalize on mispricing between CB and its underlying stock
26
CFD (Contract for differences)
A contract that pays the differences in the settlement price between the open and closing trades. Illegal in the US because it is an over-the-counter cash payment
27
Churn
Excessive trading of assets in a client's account to rack up commission: illegal
28
CIMA
Certified Investment Management Analyst: Takes 4-5 years to get
29
CIS
Collective Investment Schemes, or mutual funds
30
Core-Satellite
Investment method: core are passive investments that track major indices. Satellites are actively managed
31
Crystallization
When a trader closes a position and immediately reopens it. Allows them to balance out net value of assets by quickly realizing a loss or profit without losing their position
32
CTA (Commodity Trading Advisor)
Advises others on trading futures contracts, options on futures
33
CFTC (Commodity Futures Trading Commission)
Regulatory body in the US
34
Custodian
An institution that holds securities in physical or electronic form to minimize risk of theft or loss
35
DCF
Discounted Cash Flow - a method of valuation based on its predicted cash flow in the future
36
DD
Due Diligence - an investigation of a potential investment
37
Delta
the estimate of how much an option can change in value based on a $1 change in the underlying security. Ranges from -1 to +1
38
Dodd Frank
Act to promote financial stability and make markets more transparent. Passed in 2010
38
Drag Along/ Tag Along
a drag along right is an agreement that allows a majority shareholder to force a minority shareholder to join in the sale of the company
Tag Along protects minority shareholders in VC deals. if a majority sells their stake, it gives the minority the right to also sell theirs
38
Equalization
Means of ensuring that every investor is charged their fair share of performance fee based on how their fund has performed
39
Event Driven
A hedge fund strategy that aims to exploit price inefficiencies before a corporate event
39
ERISA (Employee Retirement Income Security Act)
sets the minimum standards for retirement and health plans in private industry
39
ETF (Exchange Traded Fund)
Pre-defined set of bonds, stocks or commodities that people can invest in
40
Family Office
a private company that handles wealth management for a wealthy family
40
Fat tail
Describes an usually high percentage of extreme values. Tail as in in a bell curve
41
FATCA (Foreign Account Tax Compliance Act)
Requires foreign financial institutions to report on assets held by US accounts
42
Fee waterfall
Higher tiered receive interest and principal payments and lower tiered only receive only interest
43
Fiduciary
Someone who manages assets for someone else
44
Flash Crash
A rapid drop in prices in a market or stock's price due to a withdrawal of orders followed by a quick recovery
45
FOF (Fund of Funds)
A fund comprised of stocks from another fund instead of investing directly into securities
46
Form ADV
Every investment advisor must submit this to the SEC to register as one
47
Fund Administrator
Independently verify the fund assets and valuation under a manger's portfolio. They do the back office paperwork
48
Fundamental Analysis
Uses a company's revenues, earnings, returns to value it
49
Futures
A type of derivative agreement to buy or sell a product at a set future date and a set price
50
FX
Foreign Exchange Market - global over-the-counter market for exchanging currencies
51
GAAP
Generally Accepted Accounting Principles: standards that encompass the details, complexities, legalities of business accounting
52
Gate
Tool to determine the liquidity of a hedge fund. e.g. A fund with 10% gate provision means only 10% of its assets can be withdrawn by all investors in total over a single period
53
GAV
Gross Asset Value: current value of all assets held within a property fund
54
Glass Steagall
1933 and separated commercial from investment banking to protect depositors from losses from stock speculation
55
GP
General partner, they make the decisions on the fund
56
Hard and Soft closed
Accounting techniques: hard is closed-book and no possibility of future financial data changing numbers, soft is more ambiguous and books remain open
57
Hedging
Buying and selling an investment to reduce the potential loss
58
HFT
High Frequency Trading: using a computer to execute high number of trades at once
59
HNW
High Net Worth: $1-5 million
60
Hurdle
Minimum acceptable rate of return for an investment to be financially viable
61
HWM
High Water Mark: highest peak of value an investment reached
62
IRR
Internal Rate of Return: metric used to analyze profitability of an investment. Discount rate that makes the NPV (Net present value) equal zero in a DCF
63
ISDA
International Swaps and Derivatives Association: private trade organization whose members, mainly banks, transact in OTC market
64
ITD
Inception to Date balances represent the total activity, both actual budgeted, that has occurred since the start of a project
65
J-Curve
Shows that investments may have an initial loss, but has dramatic gain after
66
JGB
Japanese Government Bonds
67
JOBS ACT
Allows companies to access funding in ways that were not allowed before due to regulations. Reduced regulation
68
Key man
Important employee that is core to operations
69
KYC
Know Your Costumer: process of identifying and verifying identity
70
L/S
Long/ Short equity: a strategy with a mix of long and short positions
71
Liquidation preference
A clause in the contract that guarantees that some investors get their money back before some others in the case of a corporate liquidation
72
Liquidity
How easy an asset can be converted into cash, how easy you can buy or sell an asset without changing its price
73
Local ID Market
Trading market usually only accessible by banks and financial institutions
74
Lockup
Agreements that prohibit company insiders (including friends and family) from selling their shares for a period of time after an IPO
75
LP
Limited Partnership: there is one GP and LPs don't manage the business
76
Macro
How economic fluctuations affect asset prices
77
Madoff
Largest Ponzi scheme in history: he attracted investors and used their funds to pay off old investors
78
Market/ sector/ style - neutral
Strategy that seeks to avoid market risk entirely and profit from both increasing and decreasing prices
79
Master feeder
A device commonly used by hedge funds to pool taxable and tax-exempt capital from investors in the US and abroad from "feeder" funds into a master fund
80
Merger Arbitrage
Trading in stocks of companies that are involved in proposed takeovers or mergers e.g. buying a targeted company for a discount price, betting the deal goes through
81
MFO
Multi-Family Offices: managing the wealth of a few affluent families
82
Middle Office
Between front and back office, manages risk and calculates P&L
83
MTD
Month to Date: the period starting from the current month's beginning till the most recent date
84
MTM/ M-T-M
Method of measuring the fair value of assets that may fluctuate over time
85
Multi-Strategy
Funds that use multiple strategies
86
NAV
Net Asset Value: a company's assets minus liabilities
87
NDA
Non-Disclosure Agreement: promise that you can't leak disclosed financial agreements
88
NDF
Non-Deliverable Forward: foreign exchange derivatives contract where two parties agree to exchange cash at a given date
89
NFA
Net Foreign Assets: Net amount of foreign assets that a country owns
90
OM
Offering Memorandum: a legal document that details objectives, risks and terms of an investment involved in a private placement in real estate
91
Onshore/ Offshore
Onshore activity is in your home country, offshore is foreign
92
Open ended fund vs close end fund
Open-end fund issues new shares whenever new investors choose to buy into it and repurchases them when they're available, close end funds only issue shares once
93
OTC
Over the Counter, no regulator, informal
94
PE
Private Equity: Owning private companies
95
PFIC
Passive Foreign Investment Company: a foreign (non-US) company that exhibits one of the two tests: 1. 75+% of its gross income is passive income, 50+% of its assets produce passive income
96
PIK
Payment In Kind: Use of a service or good as payment instead of cash
97
PPM
Private Placement Memorandum: A legal document used by owners of private companies for prospective investors
98
Pre-money/ past-money
pre: a valuation of a company before any outside investments, post is after outside investments
99
Prime broker
Institutions that conduct complex financial trading, like investment banks
100
Record Date
Set by the board of directors, the date on which the company compiles a list of shareholders of the stock for which it has declared a dividend
101
Rehypothecation
Where banks, brokers and individuals use collateral that they don't own to help finance assets
102
Relative value
Method of determining an asset's value that takes into account the value of similar assets
103
Safe harbor
A legal provision to reduce legal and regulatory liability in certain cases where certain conditions are met
104
SEC ERA
Exempt Reporting Advisors are advisors that are not required to register with the SEC (Securities and Exchange Committee) but still must pay fees and give public reports
105
Seeder
Equity-based funding, in the very early stages of a startup.
106
SESC
Securities and Exchange Surveillance Commission: Japanese agency under FSA, ensures fair transactions in both securities and financial futures markets
107
SFC
Securities and Futures Commission: non-governmental body in Hong Kong that regulates securities and futures markets
108
Share Series
A class of shares is a category of stock that may have different voting rights and dividends. Series are a subclass of class
109
Sharpe
Ratio that is one of the most widely used methods for measuring risk-adjusted returns. Compares a fund's historical or projected returns relative to an investment benchmark with the historical or expected variability of such returns
110
Side letter
Agreements between fundraisers and investors that provide certain rights, privileges and obligations outside the standard investment document's terms
111
side pocket
Way of separating problem assets from the rest of the fund until the problem is resolved, i.e. assets affected by Ukraine War
112
Soft dollar
Commission payments to a brokerage firm that are used, in part, to pay for other services such as research
113
Sortino Ratio
Risk-adjustment metric used to determine the additional return for each unit of downside risk. It is computed by first finding the difference between an investment's average return rate and the risk-free rate.
114
Stock Connect
Mutual Market Access program through which investors in the Mainland China and Hong Kong can trade and settle shares listed on the other market via the stock exchanges and clearing houses in their home market
115
SWF
Sovereign Wealth Fund: an investment fund owned by the state
116
Technical Analysis
Using price-data and volume data to analyze securities, often using charts
117
Total Return Swap
a financial contract that transfers both the credit risk and market risk of an underlying asset
118
UCITS
undertaking for collective investment in transferable securities
119
UHNW
Ultra High Net Worth: over $30 million
120
Unit Trust
a type of mutual fund where money from many investors (called “unit holders”), is managed by a fund manager to achieve a specific return
121
Value Date
when funds are posted to an account and available for immediate use
122
VaR
Value at Risk: a measure of the potential loss that an asset, portfolio, or firm might experience over a given period of time
123
VWAP
Volume-weighted Average Price: measurement that shows the average price of a security, adjusted for its volume
124
Waterfall
how the cash from an investment flows down to the different parties involved.
125
Yard
financial term meaning one billion
126
YTD
Year to Date: a term covering the period between the beginning of the year and the present
