Long-Term Capital Management (LTCM) was a large hedge fund run by Nobel Laureates in Economics and prominent Wall Street traders.
LTCM was profitable during its heyday in the 1990s, raising over $1 billion in investor capital, promising that its arbitrage strategy would bring huge returns to investors.
LTCM’s highly leveraged trading strategies didn’t work, and with mounting losses due to Russia’s default, the US government had to step in and stage a bailout to stave off global financial contagion.
Eventually, a loan fund made up of a consortium of Wall Street banks was set up to bail out LTCM in September 1998, allowing it to be liquidated in due course.
Exception 3(c)(7) pertains to a section of the Investment Company Act of the 1940s allowing qualifying private funds to be exempt from certain SEC rules.
3C1 refers to the part of the Investment Company Act of 1940 that exempts certain private equity firms from regulation.
– A firm to be defined as an investment company must comply with certain regulatory and reporting requirements set by the SEC.
Attribution analysis is an evaluation tool used to explain and analyze the performance of a portfolio (or portfolio manager), especially when compared to a certain benchmark.
in the master-feeder structure, investment funds are formed from the capital of investors; these feeder funds in turn invest in a centralized master fund.
In finance, redemption means the redemption of a fixed income security, such as a Treasury bill, certificate of deposit, or bond, on or before the due date.
Two refers to a standard management fee of 2% of assets per year, and 20 means an incentive fee of 20% of profits above a certain threshold, known as the Threshold Rate.