Future Events

Decisive action by central banks seemed to restore normal activity after confidence in the credit structure evaporated in the summer, but have any of the underlying problems been solved? This course examines the factors that caused the loss of confidence; explains what the problems are leading to; suggests way in which investment managers can prepare themselves.

• The roles of the Eurasian savings glut and excessive monetary stimulation
• Divorcing credit creation and credit risk
• Avoiding bank capital adequacy regulations

• Structured finance
• The differences between sovereign and corporate ratings and structured finance ratings
• How the rating agencies can get it so wrong and what they need to do to get it right

• The cycle between high and low rates of return
• The problems of defined benefit pension plans and other regulated investors
• Risk seeking under priced risk
• Credit insurance

• Derivatives
• Hedge funds o Negative amortization mortgages
• Special Investment Vehicles
• The spread of CDO
• Deteriorating confidence in credit

• The economic importance of households
• Implications of poor household balance sheets
• The need for de-leverage
• What fiscal and monetary policy can do
• Probable outcome

A full-day course aimed at newcomers to equity research either investment professionals experienced in other asset classes, who want to deepen their equity research skills, or recent arrivals in the industry. It is addressed at both buy and sell side professionals.

Overview

Equity investment is probably the most complex and often frustrating of all asset classes; it combines a wide range of imprecise, qualitative aspects with the more usual quantitative disciplines of investment analysis. Much of the sector’s practice and jargon appears to serve as a barrier to understanding and structuring decisions.

The aim of the course is to identify, characterise and isolate the relevant qualitative aspects as a first step to organising rigorous processes to manage the mass of different kinds of data that affect equity prices. Once the equity investor has the clarity and confidence to sort and evaluate the individual pieces of data, it becomes possible to establish how they relate to each other and to formulate a coherent and consistent method to track these relationships.

• Equity data is soft
• Expectations, forecasts and prophesy
• An individual equity belongs to a number of asset classes
• The law of undetected causes
• The trap of DIY determinism
• How to line up your ducks/geese/swans

• The panglossian asset class
• Fixing the nature of the beast
• Culture and motivation
• The past and the possible
• Deals or diversions?

• Exceptionalism and the cycle
• Limitations of the privileged insight
• Dynamics of evolution
• Divergent levels of reliability

• History matters
• Comparators and contingencies
• The cycle of causalities
• Pilot fish or piranhas
• Legislating for non-financial denominators

• Deepening the data set
• Audit trail of decision-making
• Stress-testing assumptions
• Quantifying confidence

A half-day course aimed at executives in quoted companies – especially those undertaking an IPO or unfamiliar with equity market practices – who need to deal with sell-side analysts and want a detailed briefing on their motivations and modus operandi.

Overview

Sell-side analysts are one of the key points of contact between quoted companies and the financial markets. And they are often one of the least predicable of even comprehensible; managing the relationship can a frustrating and pitfall strewn experience for CEOs and CFOs.

This course aims to provide you with a full background brief on sell-side analysts so that you can structure and drive your relationships with them in the way that you want.

• An inevitable but unnecessary evil
• Paparazzi and P&Ls
• Analysts in the equity trading cycle
• What they can do and what they can't do
• Can one analyst move a share price?
• Analysts and the media

• A cost centre in search of revenue
• Relative importance of their external and internal customers
• The differences between your company's relationship with analysts and its relationship with other investment bankers
• Who do analysts think is important?

• Their key outputs
• Written research reports and the stuff that really matters
• What are their sources of data?
• Relative versus absolute judgements
• Perpetuators of fallacies great and small

• Your range of options
• The omniverous ear and the tone-deaf finger-tip
• Getting the right side of self-censorship
• To guide or not to guide
• The revolving door

Economists have long debated whether capital flows are driven predominately by fully informed astute investors differentiating between markets and companies based on fundamentals or whether they are caused by ‘rogue speculators' with little knowledge of or appreciation for fundamentals. This is not a subject for academic seminars – the readjustment of the enormous saving and investment imbalances in the world today is arguably the single most important and challenging macroeconomic problem. This course considers international asset flows and assesses how savings and investment imbalances affect asset flows; the role of exchange manipulation and central banks in these imbalances; the roles of FDI, portfolio flows and hot money and carry trade and arbitraging national yield curves.

• Saving, investment and capital flows
• International financial institutions
• Role of central banks
• Vulnerability of independent currencies in developing countries

• FDI
• portfolio flows
• hot money
• barriers to capital flows
• are World Bank and IMF fiscal and monetary prescriptions suitable to developing nations?

• Fundamental linkages during crisis periods
• demonstration effects
• pure contagion, herding and informational cascades

• The ‘dark matter’ school
• Bretton Woods II
• probable outcome

This course develops an understanding of the role of private equity in the economy, the structure of the industry, its participants, and the forces that shape its ongoing development. It examines the advantages and disadvantages of a private equity vs. a strategic investor takeover; the advantages and disadvantages of private equity from the investors' point of view; borrowing to pay dividends; the role of fiscal and monetary policy in the growth of private equity and private equity and emerging markets in the context of the growing political backlash against private equity in North America and Europe

• Industry overview
• Asset allocation
• The macro viewpoint

• Key factors distinguishing past success and failure across time and space
• Lessons on successful exits in emerging market deals

• Regional variations
• Closed deals
• Due diligence and valuation
• Evaluating and selecting a local emerging markets partner

• Exits
• Hedge funds
• Cyclical investing and publicly traded investment funds
• The private equity benefits controversy
• The international political backlash

• Conventional wisdom today
• Pros and cons of accepting funding and other forms of participation from public sector donors
• Forthcoming policy reforms in recipient countries

We have entered a period of increasing volatility in financial markets, so protection against falling asset prices will add great value to long only funds. This course will give long only fund managers the tools they need to protect portfolios from the periodic declines in the prices of their assets.

• The advantages and risks of shorting in a long only fund
• The infrastructure changes needed to short trade
• Should day to day decisions be made in house or contracted out?

• Inverse index and mutual funds
• Hedging with cash and securities with different characteristics
• Hedging with derivatives

• Credit default swaps
• Contracts for difference

Aimed at pension fund managers, portfolio managers, marketing managers, client managers, risk managers, security and market analysts

Overview

At the foundation of finance is the idea that investors and managers act rationally so that capital market prices reflect fundamentals and managers respond to incentives in predictable ways. Behavioural finance rejects this and suggests our brains are wired to cause us to make costly investment mistakes. It is normal for investors to become caught up in emotions, second-guess their allocation to various asset classes, and make inappropriate changes to their portfolios.

This Masterclass examines why we should take into account social, cognitive, and emotional biases in individual choice and in market outcomes. By helping us to understand the kinds of errors that investors tend to make in managing their portfolios, behavioural finance can help steer portfolio allocation decisions and allow us to locate profit opportunities for investment managers more successfully.

• The limits to arbitrage, noise traders vs arbitrageurs;
• The biases, beliefs, and bizarre investment behaviours beneath our rational exteriors;
• The evidence for the presence of these effects in professional and amateur investors;
• Why these ‘irrational’ behaviours occur and why they are hard to eradicate;
• The good side of these behaviours and why we wouldn’t want to completely eradicate them;
• How to identify the presence of the psychological biases in your trading;
• The insights of the new science of Neuro economics of financial decision making.