The purpose of this paper is events and analysis of present a hedge fund collapse, offer lessons to investors and hedge fund industry stakeholders and propose a possible remedy…
Abstract
Purpose
The purpose of this paper is events and analysis of present a hedge fund collapse, offer lessons to investors and hedge fund industry stakeholders and propose a possible remedy for mitigating operational risks and associated potential losses.
Design/methodology/approach
This study focused on one hedge fund case study and conducted a thorough investigation of the events that led to the collapse and eventual filing of the Securities and Exchange Commission (SEC) complaint. All articles and publications used for this research are available in the public domain and accessible.
Findings
Wood River Capital Management had concentrated the portfolios of its two hedge funds into one stock, EndWave Corp. Fund Manager violated terms of offering memorandum. Investors were not made aware of and did not discover the operational risks. Stock price of EndWave plummeted. There was no independent oversight over the funds. The values of the two funds dropped significantly. Investors attempted to redeem but the funds were not liquid. The SEC filed a complaint. Mr Whittier was sentenced for three years in jail.
Research limitations/implications
It is an analysis of US-based hedge fund, not an empirical paper. The article presents critical analysis and offers many valuable lessons to hedge fund industry stakeholders.
Practical implications
This paper helps investors in terms of identifying a hedge fund’s operational risks and conducting more effective due diligence while vetting a hedge fund. This could potentially save investors and constituents billions of dollars, by avoiding potential hedge fund collapses. This paper suggests that the scope of fiduciary duty be expanded to cover hedge fund industry vendors.
Originality/value
Thorough research of a hedge fund that collapsed because of poor investment decisions, not self-enrichment at expense of fund investors. This paper provides lessons to investors in terms of identifying a hedge fund’s critical operational risks and conducting value preserving due diligence. This could potentially save hedge funds investors billions of dollars, by avoiding potential hedge fund collapses. This paper recommends that the scope of fiduciary duty be expanded to cover hedge fund industry vendors.
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Argues that the requirement for references from prospective tenantsby property managers is a legal obligation. Considers the nature of theproperty manager′s duty to obtain…
Abstract
Argues that the requirement for references from prospective tenants by property managers is a legal obligation. Considers the nature of the property manager′s duty to obtain references, as well as the nature and extent of this duty, using case law examples. Concludes that the property manager has an interpretative, rather than express function concerning tenant suitability, making the term “professional” appropriate to his function in such situations.
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Ignacio Vélez‐Pareja and Joseph Tham
It is a well known problem the interactions between the market value of cash flows and the discount rate (usually the weighted average cost of capital, WACC) to calculate that…
Abstract
It is a well known problem the interactions between the market value of cash flows and the discount rate (usually the weighted average cost of capital, WACC) to calculate that value. This is mentioned in almost all text books in corporate finance. However, the solution adopted by most authors is to assume a constant leverage D%, and hence assume that the leverage gives raise to an optimal capital structure and the discount rate is constant. On the other hand, most authors use the definition of the Ke, the cost of leveraged equity for perpetuities even if the planning horizon is finite. Among these authors we find the work of Wood and Leitch W&L 2004. In this article we wish to analyse the claim made by W&L 2004 in the sense to have found an iterative solution to the problem of circularity that results in a “near” matching with the Adjusted Present Value APV, proposed by Myers, 1974. They use as the basic principle the fact that there is a “near” constant relation between Ke the cost of equity and Kd the cost of debt. They consider as well that the cost of debt Kd is not constant and changes proportionately with the leverage D%. We propose a very simple and precise approach to solve the above mentioned circularity problem.
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Nigel Dann and Sue Wood
This paper presents a review of the literature pertinent to the management of the maintenance of historic buildings. First, literature on the philosophy and principles of…
Abstract
This paper presents a review of the literature pertinent to the management of the maintenance of historic buildings. First, literature on the philosophy and principles of conservation is considered, followed by a review of the more recent subject of the management of conservation and its processes. Throughout the review the maintenance management requirements of heritage and non‐heritage buildings are compared and contrasted. Key themes are identified for best practice (including those for condition surveys) and the paper concludes with the identification of perceived gaps in knowledge.
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N.R. Mazure and J.C. Trigg Waddell
Seeks to tackle in the broadest possible terms the legal andpractical aspects of fraud and negligence claims in relation toresidential mortgage valuations and surveys carried out…
Abstract
Seeks to tackle in the broadest possible terms the legal and practical aspects of fraud and negligence claims in relation to residential mortgage valuations and surveys carried out by the surveying profession. Includes underwriting, lenders claims, defective property and valuation for mortgage purposes. cites case law regarding the difference between open market value and mortgage calculation. Concludes that the valuation for mortgage purposes may lead to an entirely different conclusion from open market value.
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Wei Liu, Bobo Zhang, Rui Sun and Shuwen Li
As coaching assumes an increasingly critical role in satisfying employees' demands for growth, the function of coaching has progressively shifted towards direct supervisors. This…
Abstract
Purpose
As coaching assumes an increasingly critical role in satisfying employees' demands for growth, the function of coaching has progressively shifted towards direct supervisors. This study seeks to investigate the distinct effects of managerial coaching behaviors on employee outcomes from an emotional perspective. Specifically, we aim to explore whether leaders' encourage-to-explore and guide-to-learn behaviors impact employees' creativity and performance through discrete emotional mechanisms upon appraisal theory of emotion.
Design/methodology/approach
We conducted two studies to test our proposition. In study 1, an experiment using coaching scenarios was performed with 128 students majoring in management. In study 2, data were collected from 311 supervisor-subordinate dyads.
Findings
The results indicate that encourage-to-explore behaviors are positively related to employee creativity by fostering feelings of inspiration, and guide-to-learn behaviors are positively related to employee performance by alleviating anxiety. These findings suggest that different leaders’ coaching behaviors influence employee outcomes through different emotional processes. The theoretical and practical implications of the findings are also discussed.
Originality/value
These findings suggest that different leaders’ coaching behaviors influence employee outcomes through different emotional processes. The theoretical and practical implications of the findings are also discussed.
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Abstract
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MASSEYVILLE, ONT., heads the list of those places in the late British Empire where I hope never to return. The city bears out R. T. Glover's verdict on another part of Canada…
Abstract
MASSEYVILLE, ONT., heads the list of those places in the late British Empire where I hope never to return. The city bears out R. T. Glover's verdict on another part of Canada: ‘One could live there for the sake of a dear one—but it would certainly temper bereavement.’ However, it is to Masseyville that I do return, in 1943, fate and necessity together having called my bluff of ‘Will Go Anywhere, Do Anything'.’