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Hedge Fund Course
1. Introduction and Hedge Fund Course Overview
Course Introduction (1:01)
Study Plan (3:43)
Course Material Download
Support FAQ
2. Overview of Hedge Funds and Key Terms
Introduction to Overview of Hedge Funds and Key Terms (0:19)
What is a Hedge Fund? (5:17)
Hedge Funds vs. Mutual Funds (3:13)
Understanding Hedge Fund Returns and Fees (2:56)
Gross vs. Net Returns (2:22)
What is a Long Investment? (5:51)
What is a Short Investment? (7:55)
Understanding Shorting Mechanics (Borrowing Costs, Short Interest, Short Squeeze) (7:17)
Hedge Fund Gross and Net Exposure (4:47)
The Hedge Fund Landscape and Overview of Strategies (4:28)
Single vs. Multi-Manager Equities Landscape (4:45)
Overview of Single-Manager Fund Strategies (Pros & Cons, Model Risks) (7:41)
Strategy Overview: Long-Only and Mutual Funds (5:18)
Strategy Overview: Activist Funds (3:50)
Strategy Overview: Long-Short and Tiger Cubs (4:04)
Overview of Multi-Manager Fund Strategies (4:04)
What are Pass-Through Fees? (4:19)
Strategy Overview: Pods and the Market-Neutral Business Model (4:26)
Strategy Overview: Pods (External Manager Relationships) (4:35)
Strategy Overview: Pods (Market Share and Pros & Cons) (5:12)
Other Public Equity Investors (Asset Managers, Family Offices, Pension Funds) (4:50)
3. The Hedge Fund Business Model
Hedge Fund Business Model Terms (Liquidity, Lockup, etc.) (5:03)
What is a Hurdle Rate and High-Water Mark? (with Examples) (5:56)
Hedge Fund Performance Metrics - Alpha (5:58)
Hedge Fund Performance Metrics - Beta (3:45)
Hedge Fund Performance Metrics - Sharpe Ratio (6:13)
Understanding Hedge Fund Performance by Strategy (5:40)
How are Public Equities Managers Evaluated? (3:40)
Hedge Fund Corporate Structure Overview (5:09)
Hedge Fund Roles & Operations (7:45)
What is "Leverage" In the Context of a Hedge Fund? (8:11)
What is a "Factor" and Overview of Factor Investing (5:58)
Drawdown Risk and Withdrawals (6:35)
Knowledge Assessment I
Knowledge Assessment I Answers
4. Recruiting Strategy and Cognitive Assessments
Introduction to Recruiting Strategy and Cognitive Assessments (0:16)
Why Recruit for Hedge Funds? (4:56)
Hedge Fund Recruiting Dynamics (8:06)
Illustrative Hedge Fund Recruiting Process (6:12)
The Hedge Fund Recruiting Timeline (6:32)
Tracking Hedge Fund Opportunities (4:34)
Top Hedge Fund Recruiters and How to Deal With Them (6:26)
How to Evaluate a Hedge Fund (7:06)
Tangible Factors to Consider for a Hedge Fund Job (4:22)
Cognitive Assessments and the Wonderlic (3:19)
Wonderlic Assessment I
Wonderlic Assessment I Answers
Wonderlic Assessment II
Wonderlic Assessment II Answers
5. Qualitative Interview and Preparation
Introduction to Qualitative Interview and Preparation (0:17)
Typical Interview Format and Qualitative Interview Tips (4:06)
Why Hedge Funds? (6:08)
Why This Firm? (6:43)
Questions to Ask Interviewer (1:56)
6. Hedge Fund Compensation
Introduction to Compensation (0:14)
Hedge Fund Compensation (Salary and Bonus Data) (5:00)
Hedge Fund Team Bonus Pool Example (2:15)
7. 3-Statement Modeling and Financial Analysis
Introduction to 3-Statement Modeling and Financial Analysis (0:22)
The Purpose of Financial Modeling & Overview of the 3 Statements (4:31)
The Income Statement (Walkthrough and Rules) (6:20)
What is a Revenue Build? (with Examples) (7:00)
Revenue Build - Example #1 (Broadcom) (8:48)
Revenue Build - Example #2 (Gartner) (8:13)
Income Statement Expenses (4:05)
Non-Cash Expenses (D&A and SBC) (5:05)
Understanding EBITDA and Free Cash Flow (4:35)
Operating Cost Build - Example #1 (Broadcom) (4:22)
Operating Cost Build - Example #2 (Gartner) (5:06)
Equity Dilution (SBC, Share Issuance, TSM) (13:23)
Net Income & EPS Build (Broadcom) (5:28)
Net Income & EPS Build (Gartner) (4:59)
The Cash Flow Statement (5:02)
Cash Flow Statement Items (Operations, Investing, Financing) (6:59)
What is Net Working Capital? (10:07)
Balance Sheet and Balance Sheet Rules (6:26)
Balance Sheet Items (Assets, Liabilities & Equity) (5:40)
Common Balance Sheet Formulas (5:50)
Cash Flow and Balance Sheet Build - Example #1 (Broadcom) (8:05)
Cash Flow and Balance Sheet Build - Example #2 (Gartner) (5:39)
GAAP vs. Non-GAAP Financials (6:23)
Common Non-GAAP Adjustments (3:37)
GAAP and Non-GAAP Builds (Broadcom and Eaton) (6:45)
Financial Model Test #1 (25:05)
Financial Model Test #2 (19:32)
Financial Model Test #3 (29:07)
Financial Model Test #4 (50:58)
8. Public Company Modeling
Introduction to Public Company Modeling (0:15)
Financial Model Formatting Conventions (5:32)
Excel Custom Formatting (6:00)
How to Troubleshoot a Balance Sheet (10:50)
Public vs. Private Company Modeling (5:51)
Quarterly Modeling and Common Issues (4:57)
"Find & Replace" Modeling Trick (4:32)
9. Comparables Analysis and Multiples
Introduction to Comparables Analysis and Multiples (0:12)
Valuation Multiple Refresher (6:50)
What is the Comparable Companies Analysis? (9:36)
Valuation Metrics (6:32)
Benchmarking Financials and Implying Company Valuation (4:49)
What is the Analysis at Various Prices? (2:37)
How to Perform a Comparable Companies Analysis (35:13)
Comps Analysis of Shake Shack (16:52)
Analysis at Various Prices of Shake Shack (8:42)
What Drives Valuation Multiples? (5:33)
10. Discounted Cash Flow and Enterprise Value
Introduction to Discounted Cash Flow and Enterprise Value (0:15)
Key Valuation Concepts and Overview of the Discounted Cash Flow (5:23)
Discount Rate and Terminal Value Multiple (8:42)
Terminal Value (Exit Multiple & Perpetuity Growth Method) (6:46)
Discounted Cash Flow Walkthrough (13:50)
Enterprise Value and Capital Structure (8:35)
What is Non-Controlling Interest? (5:08)
11. Stock Pitches and Investment Theses
Introduction to Stock Pitches (0:24)
Stock Pitch Expectations and Interview Formats (8:44)
How to Prepare for a Stock Pitch (4:54)
Understanding a Company's Business Model (4:05)
Unit Economics and Contribution Margin (6:27)
Unit Economics - Lifetime Value & Customer Acquisition Cost (5:27)
Unit Economics - LTV/CAC Examples (9:24)
Unit Economics - Internal Rate of Return (12:28)
The "7 Powers" Framework (4:16)
Screening for Stock Pitches and Idea Generation (10:09)
Typical Stock Pitch Structure (4:52)
Example Pitches - Long Investments (10:14)
Example Pitches - Short Investments (7:06)
Knowledge Assessment II
Knowledge Assessment II Answers
12. Case Studies
Introduction to Case Studies (0:23)
a. Case Study (Broadcom) - Investment Memo Walkthrough (24:34)
b. Case Study (Gartner) - Income Statement Model Build (40:02)
b. Case Study (Gartner) - Cash Flow Statement and Balance Sheet Model Build (18:51)
b. Case Study (Gartner) - Non-GAAP Adjustments (42:29)
b. Case Study (Gartner) - Forecasting the Income Statement (25:44)
b. Case Study (Gartner) - Forecasting the Balance Sheet and Cash Flow Statement (36:42)
b. Case Study (Gartner) - Research Segment Forecast (15:05)
b. Case Study (Gartner) - Conferences Segment Forecast (9:19)
b. Case Study (Gartner) - Consulting Segment Forecast (13:29)
b. Case Study (Gartner) - PowerPoint Memo Walkthrough (11:21)
c. Case Study (Light & Wonder) - Income Statement Model Build (23:23)
c. Case Study (Light & Wonder) - Balance Sheet Model Build (26:23)
c. Case Study (Light & Wonder) - Cash Flow Statement Model Build (40:03)
c. Case Study (Light & Wonder) - Non-GAAP Adjustments (21:45)
c. Case Study (Light & Wonder) - Forecasting the Balance Sheet and Cash Flow Statement (9:50)
c. Case Study (Light & Wonder) - Gaming Segment Forecast (25:08)
c. Case Study (Light & Wonder) - SciPlay and iGaming Segment Forecast (12:31)
c. Case Study (Light & Wonder) - Q&A Walkthrough (14:34)
d. Case Study (Project Diamond) - In-Person Long/Short Equity Case Study (39:33)
3-Statement Model Template Walkthrough (5:07)
13. Course Conclusion
Course Conclusion (0:34)
Additional Reading
Hedge Fund Certificate
Give Peak Frameworks a Shout Out
Shout Out and Hedge Fund Course Survey
Understanding Shorting Mechanics (Borrowing Costs, Short Interest, Short Squeeze)
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