Hedge fund and Material adverse effect: Difference between pages

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A higher risk investment fund often characterised by taking short positions as well as long positions, including speculative positions in derivatives.
(MAE).  


Hedge funds operate in a wide range of markets, with a wide variety of strategies.
A clause in a loan agreement.


Many of them are highly leveraged and are typically designed for more sophisticated investors.
It is intended as a 'catch-all' clause and states that if there is a change in the circumstances of the borrower that materially and adversely affects the borrower's ability to repay, then this will constitute an event of default.
 
 
The 'hedge' part of their name originally suggested that they were hedged against any adverse effects from general falls or rises in markets, because of the taking of linked short and long positions by the earliest hedge funds.
 
This is no longer generally the case.  




== See also ==
== See also ==
* [[Derivative instrument]]
* [[Event of default]]
* [[Fund]]
* [[Loan agreement]]
* [[Hedging]]
* [[Material adverse change]]
* [[Leveraged]]
* [[Adverse event]]
* [[Long position]]
* [[Prime brokerage]]
* [[Short position]]
*[[Side pocket]]


[[Category:The_business_context]]
[[Category:Bank_Lending]]
[[Category:Corporate_finance]]
[[Category:Debt_Capital_Markets]]
[[Category:Investment]]
[[Category:Legal_Documentation]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]

Revision as of 07:35, 5 July 2014

(MAE).

A clause in a loan agreement.

It is intended as a 'catch-all' clause and states that if there is a change in the circumstances of the borrower that materially and adversely affects the borrower's ability to repay, then this will constitute an event of default.


See also