What is the life of a venture capital fund, and how long might it take for an investor to get his or her investment back?
Answer to relevant QuestionsMany people think of risk as the danger of losing money. Is this the same way that risk is defined in finance? In order to turn an investment into a tangible return, a venture capital fund must have an exit strategy. What exit strategies exist, and how are they affected by the stock market? Why do hedge funds like dark pools? Explain the concept of a core-satellite portfolio and why it is commonly used by large pension funds. Include a discussion of how private equity and hedge funds fit into this type of portfolio. What does a high R2 (correlation) between a fund’s excess returns and the market’s excess returns indicate about the fund manager’s ability to effectively diversify?
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