Pine street capital case

Option hedging still keeping utilizing leverage and protect against large negative movement. We invest in U. Continuing to hedge market risk by short selling Choice 2: Options can better immunize against market fluctuations.

More Essay Examples on Investment Rubric 2. We generally invest in manufacturing, business services, consumer products, healthcare, and media companies.

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Fund manager are expertise in the technology industry and thus the fund deals with technology driven companies which fund managers are comfortable in prediction of individual stock related risk and return and they are able to evaluate the technology field and pick up outperforming and positive alpha stocks in the technology field accurately.

But for hedge funds, they are not publicly owned, so are less regulated than mutual funds.

Pine Street Capital Harvard Case Solution & Analysis

We will consider transactions outside of these regions for i transactions sponsored by equity groups with which we have a prior relationship, and ii unsponsored transactions where we know the management team or are introduced to the opportunity through a direct relationship.

Hedge funds also enjoy other additional privileges but the main differences lie in the ability for hedge fund to use leverage and to hedge by shorting or using options to limit the overall risk of their investments.

PSC adopts this strategy because it believes that it is very specialized in the technology sector and hence be able to evaluate the f For example see below Table 1 if today PSC want to hedge out its value of stock portfolio, eliminating market risk from the long portfolio leaves the portfolio with a guaranteed 3.

Risks that Pine Street Capital wanted to hedge is: How would you hedge risks on July 26 using a short-selling strategy? Hedging Strategy of PSC PSC adopts the market-neutral strategy which means market risk beta risk is hedged away while firm-specific risk alpha risk remains.

Substituting the figure, we could calculate thatshares are needed to short. Each strategy has its own advantage in different economic conditions. The advantage of using leverage to finance a portion of the assets in a portfolio is that it may result in a higher return on equity when compared with all-equity financed portfolio.

Hedge funds are private group investments that offer equity pooling advantages similar to mutual funds. This is because for the short-sale strategy. We have experience in and have invested in a wide range of industries and business models. Instead of shorting, buy put options using the options hedgingthe return hedged portfolio would be equal to the guaranteed alpha, whether up or down movement.

What problems arise with the short-sale strategy? Pine Street Capital is considering using options for its hedging program. A guaranteed hedged portfolio of 3.

Risks that Pine Street Capital willing to bear is: Switching to using put option on the index Hedge Fund VS Mutual Fund The number of hedge funds increased a lot in the late 19th century. As to maximize the return, the fund use leverage in their exiting strategies. Our capital will allow the portfolio company to achieve an important corporate objective which materially adds value or removes an impediment to creating value; We have an opportunity to build a meaningful relationship with management and where the management team truly is looking for a partner to build value; We receive the appropriate level of return for the risk and effort we are undertaking; We have full access to information and management in order to conduct thorough due diligence; and An identifiable exit strategy for our investment.pine street risk management.

Sharing Options. Share on Facebook, opens a new window; Share on Twitter, opens a new window. We seek to apply our capital, experience and assistance in situations where most or all of the following apply: Our capital will allow the portfolio company to achieve an important corporate objective which materially adds value or Location: 54 State Street Albany, NY, United States.

Pine Street Capital Case

Pine Street Capital Case Solution,Pine Street Capital Case Analysis, Pine Street Capital Case Study Solution, Hedge fund technology is trying to solve, and / or how to hedge risks in the securities market.

His choice of hedging short selling and options. The Founda. View Homework Help - HARVARD CASE STUDY REPORT from FI at Golden Gate University.

HARVARD CASE STUDY REPORT PINE STREET CAPITAL FI - Derivative Markets Submitted to: Prof. Douglas%(18). Welcome to Pine Street Capital Formed inPine Street Capital Partners provides capital to lower middle market companies (typically $ $75 million in revenue).

We invest with experienced and committed management teams in established companies, providing mezzanine and equity capital in sponsored and unsponsored transactions in.

Background Pine Street Capital is a market-neutral hedge fund in the technology field and is facing market risk and has to decide which way to use in order to hedge the risk. It can either use short selling of NASDAQ or options hedging strategy.

Pine street capital case
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