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Wednesday 20 February 2013

Ltcm

Case 3: Long Term Capital Management
(Harvard argumentation School Case # 9-200-007, 9-200-008, 9-200-009)

Due Monday, December 6

Guidance
An east-coast university has a comparatively large endowment of $2.2 billion, managed by East-coast Endowment Management (hereafter EEM). As of today the universitys endowment is mainly invested in tralatitious asset classes much(prenominal) as stocks, bonds, and mutual funds. However, EEM has recently considered investment a portion of the endowment into bilk funds since several(prenominal) other equally prestigious institutions establish already make so and realized impressive rate of returns comp atomic number 18d to traditional asset classes over the recent years (though not so in 2008).
EEM faces some difficulties in implementing the plan to invest into hedge funds, though. The first-class honours degree challenge is, although the management team of EEM is very familiar with traditional investment vehicles (e.g., mutual funds), they are somewhat uncomfortable near their knowledge about the relatively new however invasive hedge fund industry. The second challenge is that EEM give have to persuade the universitys board of visitors (equivalent to board of directors in a corporation) to approve the plan by convincing the board members that incorporating hedge fund into endowment investments atomic number 50 benefit the university.

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In align to overcome the two challenges, EEM decides to employ independent external consultants who can offer up skilled advice on investment risk and carrying into action in the hedge fund industry before they will eventually hire a hedge fund expert into the management team. After serious discussions among the EEM managers, they have made a list of tar becharm consultant groups. In particular, EEM decides that one of such groups should come from a peer university so that the group members are acquainted with not only hedge funds but the environment of a higher education institution.
EEM requests that the group of consultants provide a thorough report on the Long...If you want to get a full essay, order it on our website: Ordercustompaper.com



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