Last updated: 20 December 2021. Hedge funds are some of the highest performing investment vehicles on the planet. They poach the top tier of talent from the world best universities, their pay their star managers tall sums. However, they're best known for targeting above-average market returns regardless of the direction of the market.
Find the shortlists of the best hedge fund books below
As well as ranking my favourite 5 hedge fund books, I've also curated other collections of top titles which may interest you.
Most of the books featured on this page can be read for free with Amazon's Kindle Unlimited free trial.
Click on any title below to see the latest price from Amazon, you'll be shocked at how affordable the most popular titles are. As an Amazon Associate, I earn a small commission from qualifying purchases which helps to support this site. This does not impact how I compile the list.
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My Top 5 Hedge Fund Books for 2021
Click covers to see latest reviews and prices1. Handbook of Hedge Funds - Francois-Serge Lhabitant
Financial Expert Rating:
Synopsis:
"A comprehensive guide to the burgeoning hedge fund industry
Intended as a comprehensive reference for investors and fund and portfolio managers, Handbook of Hedge Funds combines new material with updated information from Francois-Serge L’habitant’s two other successful hedge fund books. This book features up-to-date regulatory and historical information, new case studies and trade examples, detailed analyses of investment strategies, discussions of hedge fund indices and databases, and tips on portfolio construction.
Francois-Serge L’habitant (Geneva, Switzerland) is the Head of Investment Research at Kedge Capital. He is Professor of Finance at the University of Lausanne and at EDHEC Business School, as well as the author of five books, including Hedge Funds: Quantitative Insights (0-470-85667-X) and Hedge Funds: Myths & Limits (0-470-84477-9), both from Wiley."
Who this book is for:
A comprehensive guide for those who are serious about immersing themselves in the world of hedge funds.
Whether you're new to hedge funds or you're already well acquainted, I personally recommend this book as the next step for you to discover more.
Financial Expert Rating:
Synopsis:
"If you want to diversify your portfolio and lower your risk exposure with hedge funds, here’s what you should know: Hedge Funds For Dummies explains all the different types of funds, explores the pros and cons of funds as an investment, shows you how to find a good broker, and much more.
Authored by Ann Logue, a financial writer and hedge fund specialist, this handy, friendly guide covers all the bases for investors of all levels. Whether you’re just building your first portfolio or you’ve been investing for years, you’ll find everything you need to know inside"
Who this book is for:
With this user-friendly guide to hedge funds from an investor perspective, expect to learn about:
- What kind of fees you should expect to pay
- Picking a hedge fund advisor or broker
- Fulfilling paperwork and purchasing requirements
- Tracking fund performance yourself or through reporting services
- Hedge fund strategies for smaller portfolios
- Performing due diligence on funds that interest you
Financial Expert Rating:
Synopsis:
"An accessible guide to effectively operating in the hedge fund arena
Hedge funds are now in the news more than a thousand times a day and yet it is hard to find clear, factual information about how they operate, raise capital, and invest.
The Hedge Fund Book provides real-world case studies of various hedge fund managers providing a solid foundation in specialized hedge fund knowledge for both financial professionals and those aspiring to enter this field.
It provides an analysis of funds within different phases of their life cycles and investment processes, and examines each cycle in ways that would be informational for marketers as well as investors, bankers, and financial professionals who would like to learn more about day-to-day hedge fund operations."
Who this book is for:
What I particularly liked was that each chapter contained several types of investment and situational analyses, insights and best practices along with a review and 'test your knowledge' section.
This upgrades the reading experience from being a passive reader, to being an immersed student participating in a course.
Financial Expert Rating:
Synopsis:
"A saga of riches and rich egos, this is also a history of discovery. Drawing on insights from mathematics, economics and psychology to crack the mysteries of the market, hedge funds have transformed the world, spawning new markets in exotic financial instruments and rewriting the rules of capitalism.
And while major banks, brokers, home lenders, insurers and money market funds failed or were bailed out during the crisis of 2007-9, the hedge-fund industry survived the test, proving that money can be successfully managed without taxpayer safety nets. Anybody pondering fixes to the financial system could usefully start here: the future of finance lies in the history of hedge funds."
Who this book is for:
A detailed, lengthy and insightful look at hedge funds.
In More Money Than God: Hedge Funds and the Making of the New Elite, Sebastian Mallaby manages to entertain and explain.
And as I read the reviews left by other readers on Amazon, I see that the title is as popular with fund insiders as outsiders!
Currently rated 4.5/5.0 with over 250 5 star reviews left by fellow readers.
Financial Expert Rating:
Synopsis:
"One of the fastest growing investment sectors ever seen, hedge funds are considered by many to be exotic and inaccessible. This book provides an intensive learning experience, defining hedge funds, explaining hedge fund strategies while offering both qualitative and quantitative tools that investors need to access these types of funds.
Topics not usually covered in discussions of hedge funds are included, such as a theoretical discussion of each hedge fund strategy followed by trading examples provided by successful hedge fund managers."
Who this book is for:
At number 5 in our ranking of hedge funds comes this focused title from Filippo Stefanini.
Chapters cover investing strategies such as:
- Short selling
- Long/Short equity
- Merger arbitrage
- Convertible bond artitrage
- Fixed income arbitrage
- CDOs & mortgage-backed securities
- Distressed securities
- Event driven or special situations
- Managed futures
Global macro - Many more!
This book reads like a detailed expose of every technique employed by modern hedge funds.
It's one thing to be given a list of strategies, like the above, but it's quite another to read an entire chapter on each.
About hedge funds
In my introduction to hedge funds, I gave an overview of the varied investment strategies which hedge funds have at their disposal. These include:
- Using debt to leverage (gear up) investments made
- Taking ‘short’ positions in assets, which will provide a positive return if the price fall
- Buying undervalued assets and using arbitrage to ‘lock-in’ profits from a price discrepancy
- Using high-frequency trading algorithms to execute trades on an automated basis
- Using a combination of derivatives and investments to take complex positions.
If the sound of hedge funds piques your interest, you are not alone. In the last decade, many institutional and retail investors have become much more aware of hedge funds and have decided to get in on the action.
The best hedge funds books fall into three main categories:
Hedge fund books for beginners and experienced retail investors
These books aim to provide a broad overview of the industry, the vehicles themselves and the market players.
The investor-perspective will tilt content towards useful tips such as how to pick a good hedge fund, and how to identify the warning signs that a hedge fund is likely to provide little more than disappointment.
Hedge fund books for students or industry professionals
The second breed of hedge fund books contain extensive detail on the inner workings of hedge funds. The best hedge fund books in this category may cover areas such as:
- How hedge fund investment strategies are executed
- The legal structure and governance of a hedge fund (including how to start a hedge fund).
- How hedge funds monitor positions and manage risk
Hedge fund books which reveal industry secrets and careers
The third category of book holds memoirs, insider scoops and investigative pieces of journalism. These are attempts to lift the veil of secrecy over an industry shrouded in mystery.
These titles are often written in a style which makes them suitable for both investors and hedge fund professionals. For prospective hedge fund job applicants, they may help to provide some balance when trying to form an accurate picture of what it's actually like to work as a hedge fund analyst.
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