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1560913000.Pdf CONTENT INTRODUCTION..................................................................................................................... 4 I THEORETICAL PART OF RESEARCH ............................................................................ 7 1 Theories classification .......................................................................................................... 7 2 Investment theories ............................................................................................................... 9 2.1. Investment approaches .................................................................................................. 9 2.2. Investment psychology ................................................................................................ 11 2.3. Investment strategies ................................................................................................... 16 3 Hedge fund strategies ......................................................................................................... 19 3.1. Strategy building ......................................................................................................... 20 II ANALYTICAL PART OF RESEARCH ........................................................................... 24 4 Characteristics of analyzed hedge funds .............................................................................. 28 5 External analysis of hedge funds ......................................................................................... 34 5.1. Investment industry review ......................................................................................... 34 5.2. PESTLE external environment audit ........................................................................... 40 5.3. Comparative analysis of hedge funds’ regulation ......................................................... 44 6 Internal analysis of hedge funds .......................................................................................... 47 6.1. Hedge Fund Strategies: content and comparative analysis ........................................... 47 6.2. Comparison of failed vs. successful funds by strategies ............................................... 58 7 Identify factors influencing hedge fund results .................................................................... 59 III PRACTICAL PART OF RESEARCH ............................................................................. 65 CONCLUSION ....................................................................................................................... 66 REFERENCES ......................................................................................................................... 69 APPENDIXES .......................................................................................................................... 75 3 INTRODUCTION Hedge funds have influence on companies and global economy, that is why their strategies are important for understanding. After financial crisis of 2008 and 2014 global markets used to have unstable behavior, moreover in face of fourth industrial revolution according to Klaus Schwab’s research, technological competition will create new advantages for early adopters and weaknesses for companies who lately will start using new IT and algorithms in investment industry. After the financial crisis of 2008 and 2014, a crisis of confidence came on world markets. However, we can observe a long growing market over the last decade. The development of information technologies has changed the market and investment environment. Today, investors can receive information quickly and easily, fresh and important news about changes in the industry and this helps them be ready for corrections and reversals of the market, compared with the possibilities of 20 years ago. The best technological capabilities require large financial opportunities, given hedge funds, in the sense of attracting accredited investors (with investments starts from $ 1 million dollars), standardly develop their Research & Development departments to gain a technological advantage over competitors. Such developments increase the speed of obtaining and the amount of information processed, as well as the speed and quality of data analysis for making investment decisions. The relevance applies in the fact that Russia as a developing country and requires foreign investments in its business and infrastructure. Such investment model is classical, this model used by Singapore for example. Russia able offers profitable investment proposals in connection with resource wealth, the development of businesses across regions in a large area, hedge funds can be a useful tool to accelerate the development of businesses and the country, in addition to the return on investment. However, foreign investors under the influence of political factors, socio-cultural circumstances and business moments that differ from Western standards, for example, the difficulty of checking information, the difficulty in depositing funds, the bureaucratic liabilities, etc., prefer to invest in familiar companies and countries. Thus, due to the infusion of large funds into foreign funds, the economies of such countries supported in development. If investments are more likely to occur in foreign markets, then how will Russia develop without classical investment instruments? In this research, we will identify factors that complicate the possibility of investing in Russian hedge funds, as well as barriers in the work of the funds themselves and compare them with the opportunities and problems of hedge funds in other countries, identify differences in strategies, business, corporate and investment. Based on this analysis, recommendations will be developed to improve hedge fund strategies. The hypothesis of the study – next factors affecting the financial results of hedge funds: 4 1) technological advantage, the use of research and development to accelerate the collection and analysis of data, data for making investment decisions and trading algorithms, 2) free regulation in comparison with other investment companies, expressed in the freedom of investment and trade, 3) the impact of the political agenda on the investment portfolio formation, 4) strategies based on the understanding of the irrationality of the market and its participants, have more flexible and independent strategies, which reduces the risk of losses, 5) participation of investors in decision-making due to their special status and opportunities - institutional and individual. The problem is that the Russian investment market is developing only two decades, and the activities of Russian hedge funds are different from foreign ones, this study will allow us to identify these differences, as well as differences in the factors and conditions in which Russian hedge funds operate. For this analysis of hedge funds, you need to answer the following questions: 1. What are the competitive advantages of hedge funds as participants in the financial market? 2. What is the difference between the strategies of Russian hedge funds from foreign? 3. How are investors involved in the strategy development process? The purpose of the research is to determine the factors that influenced effectiveness of hedge funds and make recommendations on strategies in a changing environment The study consists of the following objectives: 1. literature review (theoretical study), the choice of research methods and theories for analysis, 2. data collection 3. analysis of the external and internal environment, factor analysis, 4. conclusions on the results of the study and recommendations. Research methods: 1. PESTLE analysis, 2. content analysis, 3. comparative analysis of Russian and foreign hedge funds, 4. factor analysis (correlation), 5. matrix "probability-effect", 6. SWOT analysis. The object of study – hedge funds (managers and investors). The subject of research – the factors influence on effectiveness. 5 Hedge funds are known for managing large amounts of funds, according to recent estimates of about $ 3.6 trillion. Hedge funds have minimal regulation and restriction of activity in the industry, for example, they can use derivatives and short positions. The study consists of an introduction, theoretical, analytical and practical parts, the conclusion. In practical part which presents practical recommendations for improving the activities of hedge funds. In the theoretical part, an analysis of textbooks, monographs, research, scientific and analytical articles. In the analytical part, data collected from open sources, analytical and business publications, the official sites of the hedge funds themselves, from interviews with hedge fund managers in the public domain, as well as from managers' responses to questionnaires. In research were analyzed 8 hedge funds presented in table 1.1. Table 1.1. Hedge funds list № Fund name Location Type AUM 2018, $ 1 AQR capital management Greenwich, U.S.A. LLC 203 billion 2 Bridgewater associates Westport, U.S.A. LP 124.7 billion 3 Man group London, U.K. Public 108.5 billion 4 Citadel Chicago, U.S.A. LLC 32 billion Hermitage Capital Moscow, Russia – London, UK 5 LP 4 billion Management 6 VR Global Offshore Fund Moscow, Russia Ltd. 1.7 billion 7 Arbat Capital Moscow, Russia Ltd 150 million 8 Kvadrat Black Fund SP Moscow, Russia SP 100 million 6 I THEORETICAL PART OF RESEARCH 1 Theories classification The complexity of research area and a large variety of theories make possible to contribute aspects to
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