30187 - ALTERNATIVE INVESTMENTS
Course taught in English
Go to class group/s: 31
Alternative investments are among the fastest growing sector of the investment industry. In recent years, we have seen increasing demand for non-traditional investments as institutional and private investors seek absolute-return strategies targeting a positive return in all market environments and maintaining low correlations with traditional asset classes. This has led to the development of the alternative investment industry. The course aims to provide an in-depth understanding of the alternative investment techniques available to private and institutional investors in a globalized market. The emphasis is on the following macro asset classes: (i) Hedge Funds and liquid alternatives and (ii) illiquid assets, such as private debt and private equity, real estate and Art, ESG and sustainable investments . Asset classes will be examined in terms of the following aspects: key characteristics, investment strategies, and portfolio consideration (risk/return profile and their contribution to portfolio diversification).
Main topics/asset classes covered:
- What are alternative investments? Definition and key characteristics.
- Hedge funds and liquid alternatives: investors typologies and regulatory framework.
- Illiquid alternatives : Private debt (focus on structured and distressed debt).
- Illiquid alternatives: Investments of passion (art and other collectibles).
- Illiquid alternatives: Private equity and venture capital
- Illiquid alternatives: Real estate and infrastructure
- Why alternatives matter in portfolio construction
- Characterize the common features of alternative investments and their markets.
- Identify the specificities of different alternative assets.
- Understand the benefits (e.g., return enhancement and/or risk diversification), and pitfalls of adding an alternative investment to a reference portfolio.
- Measure risk/return profile of alternative assets and build up optimal portfolios by using both traditional and non traditional asset classes.
- Assess and choose among different alternative assets by using both qualitative and quantitative metrics.
- Measure basic hedge funds performance in different market conditions.
- Advise a potential client on how to incorporate alternative investment in his/her portfolio according to his/her investment objectives and risk tolerance.
- Think critically, interact with their peers and defend their position.
- Face-to-face lectures
- Guest speaker's talks (in class or in distance)
- Exercises (exercises, database, software etc.)
- Case studies /Incidents (traditional, online)
- Group assignments
- Face-to-face lectures.
- Case studies (e.g., the Yale endowment).
- Guest speakers from the industry (ideally, one guest speaker for type of alternative asset class).
- Group assignment aimed to propose an optimal asset allocation taking into account certain investor's characteristics.
- Exercises to build up optimal asset allocations by using Excel solver.
|Continuous assessment||Partial exams||General exam|
Students are required to take an individual exam (general exam / two partial exams both in the form of multiple choice questions) and complete one group assignment.
The assignment will entail a written report and an in-class presentation. Detailed information on the individual exam and the group assignment will be provided during the course and made available in B-Board.
There are no required textbooks. Required readings, PowerPoint slides used in class, and any additional material are made available in Bboard.
The books below (which are not compulsory) may provide helpful additional information on traditional and alternative investment vehicles, as well as on risk / return indicators and investment analysis:
- ANSON, FABOZZI, JONES, The Handbook of Traditional and Alternative Investment Vehicles, Wiley & Sons, Inc, 2011.
- SOKOLOWSKA, The principles of alternative investment management, Springer 2016.
- CAIA, Alternative investments Level I, 3rd Edition.