Session 1 Flashcards
Evergreen fund
a fund that provides capital for new companies and makes regular injections of capital to support their development.
Evergreen funding: A situation in which a start-up receives funding in small amounts over a long period of time. This differs from an IPO or some venture capital investments, which tend to be large, one-time-only capital infusions. This tends to be a lower risk arrangement for those providing capital to the start-up, because if it fails in the meantime, no further capital infusions will be required.
Open end fund
is a collective investment scheme which can issue and redeem shares at any time. An investor will generally purchase shares in the fund directly from the fund itself rather than from the existing shareholders. It contrasts with a closed-end fund, which typically issues all the shares it will issue at the outset, with such shares usually being tradable between investors thereafter.
Mezzanine financing
Is basically debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. It is generally subordinated to debt provided by senior lenders such as banks and venture capital companies.
—paagard!—
Bylaw
a rule made by a company or society to control the actions of its members.
CFA bylaws
Litigation
the process of taking legal action: the company wishes to avoid litigation.
da’vie ghazayi
Proctor
/praakter/
moraghebe emtehan
Solicit
Ask for, seek
he called a meeting to solicit their views
Retention
negahdari, hefz
the retention of direct control by central government
Road show
A presentation by an issuer of securities to potential buyers. Road shows refer to when the management of a company that is issuing securities or doing an initial public offering (IPO) travels around the country to give presentations to analysts, fund managers and potential investors.
Buy side–Sell side
The side of Wall Street comprising the investing institutions such as mutual funds, pension funds and insurance firms that tend to buy large portions of securities for money-management purposes. The buy side is the opposite of the sell-side entities, which provide recommendations for upgrades, downgrades, target prices and opinions to the public market. Together, the buy side and sell side make up both sides of Wall Street.
Trust
- A trust is a financial arrangement in which a group of people or an organization keeps and invests money for someone.
The money will be put in trust until she is 18. - A trust is a group of people or an organization that has control of an amount of money or property and invests it on behalf of other people or as a charity.
He had set up two charitable trusts
Collateralized mortgage obligation(CMO)
A collateralized mortgage obligation is a special purpose entity that receives the mortgage repayments and owns the mortgages it receives cash flows from (called a pool). The mortgages serve as collateral, and are organized into classes based on their risk profile.
Certificate of deposit(CD)
A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC..
Swap
the exchange of one security for another to change the maturity (bonds), quality of issues (stocks or bonds), or because investment objectives have changed.
Fiduciary
involving trust, especially with regard to the relationship between a trustee and a beneficiary.
the company has a fiduciary duty to shareholders.
Proxy voting
voting on behalf of someone else.
Before the annual shareholder meeting, packets of information containing the proxy statement are sent to all shareholders. The proxy statement contains information about the topics to be covered at the annual meeting, including nominations for the board of directors and the pay packages of the top five executives. There are also proposals from management as well as shareholder proposals.
Soft dollars
The term soft dollars refers to the payments made by mutual funds (and other money managers) to their service providers. The difference between soft dollars and hard dollars is that instead of paying the service providers with cash (i.e. hard dollars), the mutual fund will pay in-kind (i.e. with soft dollars) by passing on business to the brokerage.
Let’s take a look at an example: Wittenberg LLP provides MegaMutual Fund with computer equipment and software for transmitting investment information. Under an agreement or understanding between the two firms, MegaMutual will pay for these services by directing trades through to Feral Hitch, a large brokerage firm. Feral Hitch will charge an added fee onto the trades from MegaMutual. The money from these fees will then be sent to Wittenberg, which, in turn, gets its compensation for its services to MegaMutual. The added fee usually amounts to tenths of a cent, but because MegaMutual trades billions of shares a day, the amount adds up to real money - the fee it would’ve had to pay in hard dollars.
Soft dollars are a way for mutual funds to get services without having to pay for them directly. A hard dollar payment would require a check to be issued and recorded on MegaMutual’s books, and the corresponding expense to be passed onto investors via the fund’s annual fee. Under soft dollars, the expenses are hidden in the trading costs. While the practice is not illegal and the end result is the same (the investors pay), it does not help investors analyze the costs of using one mutual fund versus another.
Commingle
mix, blend
the bank’s commingled fund
Averse
opposed to, against
mokhalef, bizar
risk averse investors.
he was averse to secrecy.
Offset
counterbalance, balance (out)
jobran kardan, khonsa kardan
the deficit has been more than offset by capital inflows.
noun: 1. enheraf- 2. moteadel konande
an offset against taxable profits.
these wheels have an offset of four inches.
Short position
- The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value. 2. In the context of options, it is the sale (also known as “writing”) of an options contract.
Long position
- The buying of a security such as a stock, commodity or currency, with the expectation that the asset will rise in value. 2. In the context of options, the buying of an options contract.
Endow
(with)
vaghf kardan
he endowed the church with lands.
Endowment fund
An endowment fund is created when a donor or the Board of Trustees specify that a gift is to be invested and only the income earned on that gift may be spent for a specific purpose. The gift amount is referred to as the principal or corpus and is held in a fund that is managed by the Finance Department.
