Wednesday, May 9, 2012

Active Portfolio Management

Active Portfolio Management

Active Portfolio Management

Authors

Active equity portfolio management is an attempt by the manager or investor, to outperform, on a risk-adjusted basis, a passive benchmark portfolio.

 

The benchmark portfolio’s average characteristics match the risk-return objectives of the client if it is an overall portfolio of the client.

 

 

Active Portfolio Management Strategies

 

1. Fundamental analysis approaches

 

Top down approach: Country rotation, asset class rotation, sector rotation

Bottom up approach: Selecting stocks for buy on the basis of undervaluation on value/growth basis and selecting stocks for sell on the basis of overvaluation on value/growth basis. Event driven trades.

 

2. Technical analysis approaches

 

Continuation of trends approach

Contrarian approach (overreaction)

 

3. Anomalies and attributes

 

Calendar effects (weekend, January)

Security characteristics (P/E, earnings momentum, firm size)

Investment style (value/Growth, large cap/small cap)
 
 

Related Articles

 

Charles on Dow on Trading and Speculation - Dow Theory

http://knol.google.com/k/narayana-rao-kvss/charles-on-dow-on-trading-and/2utb2lsm2k7a/148

Reviewed on 3.4.2011

Comments

Short urls

http://knol.google.com/k/narayana-rao/active-portfolio-management/2utb2lsm2k7a/152

Narayana Rao - 10 Nov 2011

Security Analysis Article Series – Directory

Security Analysis Article Series – Directory

Security Analysis Article Series – Directory

Security Analysis Article Series

Authors

Fundamental Analysis – Graham–Rao Method

Target Prices of Equity Shares – Concept and Utility
http://nraombakc.blogspot.com/2012/02/target-prices-of-equity-shares-concept.html



Charles on Dow on Trading and Speculation - Dow Theory
http://nraombakc.blogspot.com/2012/03/charles-dow-on-trading-and-speculation.html 



Estimating Aggregate Operating Profit Margin for the Next Year
http://nraombakc.blogspot.com/2012/03/estimating-aggregate-operating-profit.html 


Efficient Securities Markets Theory
http://nraombakc.blogspot.com/2012/03/efficient-securities-markets-theory.html



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Knol Directory - Main Categories

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Comments

Needs an update

More articles especially in technical analysis are there. They have to be added
Narayana Rao - 05 Jun 2011

Short urls

http://knol.google.com/k/-/-/2utb2lsm2k7a/140
Narayana Rao - 14 May 2011

Investment in Private Debt Securities

Investment in Private Debt Securities

Investment in Private Debt Securities

Authors

Introduction

 

The objective in investing in private placement securities is to capture a liquidity premium relative to comparable public bonds while structuring the portfolio to effectively manage risk.

 Private placement securities are privately negotiated loans that are negotiated directly between a borrower and a lender. Frequently, the lender has access to private information about the borrower that helps the lender understand the company, its objectives and financials. Private placement securities are less liquid than publicly traded bonds. Investors demand a premium beyond the credit risk premium to compensate them for this illiquidity.

 In addition to the income bonus investors earn from the liquidity premium, investors in private placements benefit from the protection of covenants that many of these deals contain. These covenants, negotiated during the private placement lending process, are a key way to make sure lender interests are protected.

 The private bond market, due to less liquidity, has a longer-term view resulting in a greater emphasis on fundamental credit research. In general, private performance is driven through consistently capturing the liquidity premium while generating long-term positive credit performance as we develop a portfolio of well-structured securities. With low market turnover, technical trades are of less priority.

 

References

Comments

Short urls

http://knol.google.com/k/-/-/2utb2lsm2k7a/203

Narayana Rao - 14 May 2011

Private Placement of Equity and Debt - Facilitators and Bankers

Private Placement of Equity and Debt - Facilitators and Bankers

Private Placement of Equity and Debt - Facilitators and Bankers

Authors

CREDIT SUISSE GROUP
 

Our Private Placement team has the insights and relationships to deliver world-class private funding.

Our debt and equity expertise provides our clients with access to high-quality private and strategic investors which raises our clients' profiles within the institutional investment community.

The Private Placement Group has one of the most effective distribution platforms in the industry. This broad distribution structure creates better pricing, promotes rapid completion of transactions and results in many of our clients using our expertise for follow-on financings or advisory work.

The Leader in Private Placements

The Private Placement Group is in a unique position to leverage the bank's resources and match companies' financing objectives with the best investors. We offer corporate finance-driven solutions complimented by the most unique marketing approach in the industry, as demonstrated by the following qualities of the group:

Superior Capability:

Consistently ranked as one of the leading firms in private placements (1)

Execution Focus:

Closed over $25 billion in traditional private financings for over 250 deals since 1997, placing an array of securities ranging from common stock to investment grade debt

Effective Distribution Structure:

Relationships with hedge funds, LBO funds, private equity funds, mezzanine funds, insurance companies, bank proprietary trading desks, pensions funds, strategic investors and family offices

Current Market Knowledge:

In the market every day, structuring, marketing and negotiating deals - we can provide updated market intelligence to achieve the best transaction for clients

Experienced Professionals:

We have a dedicated group of professionals in multiple cities focusing exclusively on private placements

  • (1) Source: Thompson Financial Securities Data

Our Private Placement Products

Capital Structures

We structure complex transactions across the capital spectrum . We customize solutions for our clients to minimize dilution and optimize their capital structure. Often these solutions involve a hybrid of debt and equity.

Stage of Clients

We have significant experience in raising capital for companies in the following growth stages:

  • Late-stage private companies
  • Public entities
  • Corporate spin-offs
  • Acquisition financing

Industry Groups of Focus

The Private Placement Group has extensive experience in providing financing solutions for companies in several different industry groups including:

  • Consumer / Retail
  • Energy
  • Financial Services
  • Healthcare
  • Industrial
  • Real Estate
  • Telecom / Media
  • Technology

Private Placement Process

We facilitate this placement process for our clients. Through our unique distribution capabilities, we target a focused group of investors and organize meetings to maximize the effectiveness of management's time. An orchestrated process increases the momentum of the transaction, thereby increasing the competitiveness of the transaction.

 
 
 
RBC Bank (USA).
 
 

Debt and Equity Private Placement

 
 
 

RBC Investment Banking Group specializes in raising traditional and non-traditional capital for middle market companies. Our deal professionals work closely with middle market business owners to raise, structure and execute debt, equity and hybrid financing. We can help optimize your capital structure for growth, expansion, acquisition, recapitalization and management buyouts.

Take advantage of the benefits our private placement practice brings:

  • Credibility and integrity in the private placement market: Our strong global brand gives confidence that our clients' transactions are attainable.
  • Client-driven process and focus: We position, negotiate and close transactions with optimum terms and conditions.
  • Experience and expert advice: We leverage experience and relationships to quickly identify market participants best suited for your goals and objectives

Debt and Equity Private Placement Capabilities:

  • Senior debt
  • Non-traditional senior debt
  • Asset-based facilities
  • Subordinated debt
  • Mezzanine financing with warrants
  • Equity capital (preferred, common, and convertible)

Comments

Short urls

http://knol.google.com/k/-/-/2utb2lsm2k7a/201

Narayana Rao - 17 Apr 2011

Thursday, May 3, 2012

Bank Portfolio and Risk Management - Bibliography

Bank Portfolio and Risk Management - Bibliography

Bank Portfolio and Risk Management - Bibliography

Authors

 
 
 
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Default Probabilities in a corporate bank portfolio: A logistic model approach, Sjur Westgaard, Nico Van Der Wijst, 2001
 
 
 
 
Portfolio Management of Default Risk
Stephen Kealhofer, 1998
 
A multi-period bank portfolio management program
J. H. May, N. Ravi, R. S. Thorn and S. Sankaranarayanan
Mathematical Modelling
Volume 9, Issue 7, 1987, Pages 521-531

Abstract
We describe a bank portfolio management program based on the complete Markowitz model, which explicitly treats risk due to unanticipated fluctuations in interest rate. Our program takes into account both inter-temporal and intra-temporal covariance. The major result of this approach is that, for the same expected return, our model yields a portfolio with significantly smaller risk than that determined by an index model. For the same risk level, our method yields a portfolio with higher expected yield. The model employs a rolling planning horizon, with time periods in the planning horizon of arbitrary length. A novelty in the model is that it permits inter-temporal transactions in the portfolio's securities by generating dummy securities to represent every possible transaction over the planning horizon. The output from the model consists of a list of portfolio strategies showing the expected after-tax return and the 1% worst case yield for each strategy. We also present an illustrative example, using real data from a large Pennsylvania bank, and compare the results from our model to the simpler variance-only and index models. The principles upon which the model is based are sufficiently general to allow the program to be expanded into a general asset-liability balance sheet management program.
 
 
Regulation of Bank Capital and Portfolio Risk, Michael Koen and Anthony Santomero, Wharton Working Paper, 1979.
 
 
An Empirical Model of Commercial Bank Portfolio Management, James L. Pierce, 1967
 
Bank Portfolio Allocation, Deposit Variability, and Availability Doctrine, Edward J Kane and Burton Malkiel,
Quarterly Journal of Economics, February 1965
 
 
A Model of Bank Portfolio Selection, Richard Porter, 1951
 
 
 
 
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Tuesday, May 1, 2012

Startup Finance - Venture Capital - India - Shopping Guide

Startup Finance - Venture Capital - India - Shopping Guide