Investment methods: fund, co-investment, direct — Flashcards

10 flashcards

In Alternative Investments (Features & Methods), what is "fund investing"?

In Alternative Investments (Features & Methods), what are the three broad categories of alternative investments?

In Alternative Investments (Features & Methods), how does a deal-by-deal (American) waterfall differ from a whole-of-fund (European) waterfall?

In Alternative Investments (Features & Methods), what is the difference between a "soft" hurdle rate and a "hard" hurdle rate?

In Alternative Investments (Features & Methods), what is a "catch-up clause"?

In Alternative Investments (Features & Methods), what is a "clawback provision"?

In Alternative Investments (Features & Methods), what is a "high-water mark"?

In Alternative Investments (Features & Methods), what is "dry powder" in private capital?

In Alternative Investments (Features & Methods), what base is used to calculate management fees for hedge funds?

#10

In Alternative Investments (Features & Methods), what is "direct investing"?

Investment methods: fund, co-investment, direct CFA Flashcards - Medical Study Cards

Master Investment methods: fund, co-investment, direct with Oncourse flashcards. These spaced repetition flashcards are designed for medical students preparing for NEET PG, USMLE Step 1, USMLE Step 2, MBBS exams, and other medical licensing examinations.

Investment methods: fund, co-investment, direct Flashcard Deck - 10 Cards

Flashcard 1: In Alternative Investments (Features & Methods), what is "fund investing"?

Answer: Investing in a pool of assets alongside other investors, using an outside fund manager who selects and manages the investments.

Flashcard 2: In Alternative Investments (Features & Methods), what are the three broad categories of alternative investments?

Answer: 1\. Private capital (private equity and private debt). 2. Real assets (real estate, infrastructure, natural resources). 3. Hedge funds.

Flashcard 3: In Alternative Investments (Features & Methods), how does a deal-by-deal (American) waterfall differ from a whole-of-fund (European) waterfall?

Answer: An American waterfall distributes profits as each individual investment is sold. A European waterfall pays no performance fees until LPs have received 100% of their initial investment plus the hurdle rate across the entire fund.

Flashcard 4: In Alternative Investments (Features & Methods), what is the difference between a "soft" hurdle rate and a "hard" hurdle rate?

Answer: With a soft hurdle, performance fees are based on the entire return once the hurdle is met. With a hard hurdle, fees are based only on the return that exceeds the hurdle rate.

Flashcard 5: In Alternative Investments (Features & Methods), what is a "catch-up clause"?

Answer: A provision that allows the GP to receive 100% of gains beyond the hurdle rate until they catch up to their stated performance fee percentage of the overall gains.

Flashcard 6: In Alternative Investments (Features & Methods), what is a "clawback provision"?

Answer: A rule stipulating that if the GP receives incentive payments on early gains that are subsequently negated by later losses, the LPs can recover the excess performance fees.

Flashcard 7: In Alternative Investments (Features & Methods), what is a "high-water mark"?

Answer: A rule ensuring no performance fee is paid on gains that only offset prior losses; the fund's net-of-fees value must exceed its previous historical high.

Flashcard 8: In Alternative Investments (Features & Methods), what is "dry powder" in private capital?

Answer: Committed capital that has not yet been drawn down or invested by the fund manager.

Flashcard 9: In Alternative Investments (Features & Methods), what base is used to calculate management fees for hedge funds?

Answer: Assets under management (AUM), typically the net asset value of the fund's investments.

Flashcard 10: In Alternative Investments (Features & Methods), what is "direct investing"?

Answer: An investor purchases assets themselves without pooling funds or using an outside specialized manager, retaining maximum control but requiring high expertise.

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Investment methods: fund, co-investment, direct Flashcards for CFA

Study 10 flashcards on Investment methods: fund, co-investment, direct for CFA Alternative Investments (Level I). These active recall cards cover the key concepts, clinical associations, and high-yield facts from this chapter of Alternative Investment Features, Methods, and Structures. Each card is designed to test your understanding rather than just recognition, building stronger and more durable memories for exam day.

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There are 10 flashcards for Investment methods: fund, co-investment, direct, covering the key concepts, clinical correlations, and high-yield facts from this chapter of Alternative Investment Features, Methods, and Structures.

How should I use these flashcards for CFA?

Read through each prompt and try to answer before revealing the back of the card. This active recall approach builds stronger memories than passive reading. Combine flashcards with the study notes and MCQ practice for the best results.

Are there more flashcards for Alternative Investment Features, Methods, and Structures?

Yes. This page covers one chapter of Alternative Investment Features, Methods, and Structures. Visit the topic page to see all chapters and their flashcards under Alternative Investments (Level I).

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