Active Management Reading List

Asset Management

 

Asset Management: A Systematic Approach to Factor Investing by Andrew Ang (New York: Oxford University Press, 2014). Presents an asset management model including factor risk premiums for different asset classes.

 

Expected Returns: An Investor’s Guide to Harvesting Market Rewards by Antti Ilmanen (Hoboken, NJ: John Wiley & Sons, 2011). The return drivers of the major asset classes.

 

Funds: Private Equity, Hedge, and All Core Structures by Matthew Hudson (Hoboken, NJ: John Wiley & Sons, 2014).  The types and structures of major investment funds.

 

Manias, Panics and Crashes: A History of Financial Crises (6th edition) by Charles P. Kindleberger and Robert Z. Aliber (New York: Palgrave Macmillan, 2011). The historical lessons and structure of speculative bubbles.

 

Hedge Funds

 

The Alpha Masters: Unlocking the Genius of the World’s Top Hedge Funds by Maneet Ahuja (Hoboken, NJ: John Wiley & Sons, 2012). Profiles of activist and global macro hedge fund managers.

 

The Big Short: Inside the Doomsday Machine by Michael Lewis (New York: W.W. Norton & Company, 2010). How hedge fund managers extracted alpha from the 2007-09 global financial crisis.

 

The Billionaire’s Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund by Anita Raghavan (New York: Business Plus, 2013). Hedge fund manager Raj Rajaratnam and the demise of the Galleon hedge fund.

 

Confidence Game: How A Hedge Fund Manager Called Wall Street’s Bluff by Christine S. Richard (Hoboken, NJ: John Wiley & Sons, 2010). Hedge fund manager Bill Ackman and the MBIA fraud investigation.

 

Efficiently Inefficient: How Smart Money Invests and Market Prices Are Determined by Lasse Heje Perdersen (Princeton, NJ: Princeton University Press, 2015). Presents a framework for how hedge funds extract alpha (excess returns above a benchmark) using active management.

 

Fooling Some of the People All of the Time (rev. edition) by David Einhorn (Hoboken, NJ: John Wiley & Sons, 2010). The fallout from hedge fund manager Einhorn’s decision to ‘short’ Allied Capital.

 

The Fundamentals of Hedge Fund Management: How to Successfully Launch and Operate a Hedge Fund (2nd edition) by Daniel A. Strachman (Hoboken, NJ: John Wiley & Sons, 2012). The operational structure of hedge funds.

 

Hedge Fund Market Wizards: How Winning Traders Win by Jack D. Schwager (Hoboken, NJ: John Wiley & Sons, 2012). Interviews with successful hedge fund managers and traders.

 

Hedge Fund Masters: How Top Hedge Fund Traders Set Goals, Overcome Barriers, and Achieve Peak Performance by Ari Kiev (Hoboken, NJ: John Wiley & Sons, 2005). The performance psychology of hedge fund traders.

 

Hedge Funds: An Analytic Perspective by Andrew W. Lo (New Haven, CT: Princeton University Press, 2010). A quantitative finance model of how hedge funds work.

 

Hedge Hogs: The Cowboy Traders Behind Wall Street’s Largest Hedge Fund Disaster by Barbara T. Dreyfuss (New York: Random House, 2013). The demise of the Amaranth hedge fund.

 

Inside The House of Money: Top Hedge Fund Traders on Profiting in the Global Markets (rev. edition) by Steven Drobny (Hoboken, NJ: John Wiley & Sons, 2009). How hedge fund traders profited during the 2003-08 speculative bubble.

 

Investment Strategies of Hedge Funds by Filippo Stefanini (Hoboken, NJ: John Wiley & Sons, 2006). Common investment strategies of major hedge funds.

 

The Invisible Hands: Top Hedge Fund Traders on Bubbles, Crashes, and Real Money by Steven Drobny (Hoboken, NJ: John Wiley & Sons, 2011). How hedge fund traders risk hedged the 2007-09 global financial crisis.

 

The Little Book of Hedge Funds: What You Need to Know About Hedge Funds but the Managers Won’t Tell You by Anthony Scaramucci (Hoboken, NJ: John Wiley & Sons, 2012). An introduction by a hedge fund manager to hedge funds as an active management vehicle to extract alpha from financial markets.

 

More Money Than God: Hedge Funds and the Making of a New Elite by Sebastian Mallaby (New York: The Penguin Press, 2010). The history of hedge funds as an active management structure and biographies of hedge fund managers.

 

Risk Management in Trading: Techniques to Drive Profitability of Hedge Funds and Trading Desks by Davis W. Edwards (Hoboken, NJ: John Wiley & Sons, 2014). Risk management strategies used by major banks and hedge funds.

 

Trade Like a Hedge Fund: 20 Successful Uncorrelated Strategies & Techniques to Winning Profits by James Altucher (Hoboken, NJ: John Wiley & Sons, 2004). The strategies and techniques that Altucher developed whilst trading for Victor Niederhoffer.

 

Visual Guide to Hedge Funds by Richard C. Wilson (Hoboken, NJ: John Wiley & Sons, 2014). An introduction to hedge funds as an active management vehicle.

 

When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein (New York: Random House, 2001). The demise of the hedge fund Long-Term Capital Management.

 

Private Equity

 

Barbarians At The Gate: The Fall of RJR Nabisco by Bryan Burrough and John Helyar (New York: HarperBusiness, 2008). The market for corporate control of RJR Nabisco and the takeover’s ‘winners curse’.

 

The Fissured Workplace: Why Work Became So Bad For So Many and What Can Be Done to Improve It (Boston, MA: Harvard University Press, 2014). A labour / union critique of the asset management / private equity model and its impact on workers.

 

The Masters of Private Equity and Venture Capital: Management Lessons from the Pioneers of Private Investing by Robert A. Finkel with David Greising (New York: McGraw-Hill, 2010). Anecdotes about private equity and venture capital deals.

 

Private Equity: Fund Types, Risks and Returns, and Regulation edited by Douglas Cumming (Hoboken, NJ: John Wiley & Sons, 2010). Private equity’s investment fund and legal structure as a form of active management.

 

Private Equity At Work: When Wall Street Manages Main Street by Eileen Appellbaum and Rosemary Batt (New York: Russell Sage Foundation, 2014). Presents a justification for and evaluation of private equity as a form of active management.

 

The Private Equity Edge by Arthur B. Laffer, William J. Hass and Shepherd G. Pryor IV (New York: McGraw-Hill, 2009). A justification for private equity as a form of experimental innovation.

 

Private Equity Operational Due Diligence: Tools to Evaluate Liquidity, Valuation, and Documentation by Jason Scharfman (Hoboken, NJ: John Wiley & Sons, 2012). Presents a framework for operational due diligence of private equity as active management.

 

Private Equity Unchained: Strategy Insights for the Institutional Investor by Thomas Meyer (New York: Palgrave Macmillan, 2014). Presents a strategic model for private equity as arbitrage.

 

Sovereign Wealth Funds

 

Sovereign Wealth Funds: Legitimacy, Governance and Global Power by Gordon L. Clark, Adam D. Dixon, and Ashby H.B. Monk (Princeton, NJ: Princeton University Press, 2013). The fund structure and investment strategies of sovereign wealth funds.

 

Value Creation

 

The Alchemy of Finance: Reading the Mind of the Market by George Soros (New York: Simon & Schuster, 1987). Presents Soros’ theory of reflexivity about financial markets, influenced by philosopher Karl Popper.

 

Antifragile: Things That Gain From Disorder by Nassim Nicholas Taleb (New York: Random House, 2012). An optionality-based philosophy of how to actively deal with luck, risk, and uncertainty.

 

Den of Thieves by James B. Stewart (New York: Touchstone, 1992). How financier Michael Milken helped to create the high yield bond / junk bond trade and caused the downfall of Drexel Burnham Lambert.

 

Learn Or Die: Using Science to Build a Leading-Edge Learning Organization by Edward D. Hess (New York: Columbia University Press, 2014). How the hedge fund Bridgewater creates a Radical Transparency culture for value creation.

 

Moneyball: The Art of Winning an Unfair Game by Michael Lewis (New York: W.W. Norton & Company, 2003). How baseball coach Billy Beane used Bill James’ sabermetrics – the statistical study of baseball performance – to transform the Oakland A’s team.

 

More Than You Know: Finding Financial Wisdom In Unconventional Places (rev. edition) by Michael J. Mauboussin (New York: Columbia University Press, 2008). How to find and extract alpha from financial markets using lessons from psychology and science.

 

The Nature of Value: How to Invest in an Adaptive Economy by Nick Gogerty (New York: Columbia University Press, 2014). Presents a value creation model used by the hedge fund Bridgewater.

 

Plutocrats: The Rise of the Global Rich and the Fall of Everyone Else by Chrystia Freeland (New York: The Free Press, 2012). The geopolitical worldview of contemporary business and financial elites.

 

The Predators’ Ball: The Inside Story of Drexel Burnham and the Rise of the Junk Bond Traders by Connie Bruck (New York: Penguin Books, 1989). How financier Michael Milken’s deal flow enabled him to take control of Drexel Burnham Lambert.

 

Putin’s Kleptocracy: Who Owns Russia? by Karen Dawisha (New York: Simon & Schuster, 2014). How Putin’s regime in Russia dealt with the oligarchs, and engaged in institutional capture and value appropriation of Russian state assets for private gain.

 

The Snowball: Warren Buffet and the Business of Life by Alice Schroeder (New York: Bantam Books, 2008). The authorised biography of value investor Warren Buffett.

 

Security Analysis (6th edition) by Benjamin Graham and David Dodd (New York: McGraw-Hill, 2008). The influential primer on value investing.

 

Steve Jobs by Walter Isaacson (New York: Simon & Schuster, 2011). The authorised biography of Apple’s co-founder Steve Jobs.

 

Why Moats Matter: The Morningstar Approach to Stock Investing by Heather Brilliant and Elizabeth Collins (Hoboken, NJ: John Wiley & Sons, 2014). Morningstar’s ‘economic moats’ framework for value creation.

 

Venture Capital

 

The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies (2nd edition) by Mahendra Ramsinghani (Hoboken, NJ: John Wiley & Sons, 2014). Interviews with venture capital practitioners on deals and term sheets.

 

Deal Terms: The Finer Points of Venture Capital Deal Structures, Valuations, Term Sheets, Stock Options, and Getting Deals Done by Alex Wilmerding (Eagan, MN: Thomson Reuters / Aspatore, 2005). Term sheets, deal structures, raising capital, and legal structures for private equity and venture capital deals.

 

Term Sheets & Valuations: A Line by Line Look at the Intricacies of Term Sheets & Valuations by Alex Wilmerding (Eagan, MN: Thomson Reuters / Aspatore, 2006).

 

Venture Capital: Investment Strategies, Structures, and Policies edited by Douglas Cumming (Hoboken, NJ: John Wiley & Sons, 2010). Venture capital’s investment fund and legal structure as a form of active management.

 

Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist (2nd edition) by Brad Feld and Jason Mendelson (Hoboken, NJ: John Wiley & Sons, 2012). The legal structure and term sheets for venture capital deals.

 

Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel with Blake Masters (London: Virgin Books, 2014). The PayPal co-founder and Facebook / SpaceX investor presents a venture capital model of value creation.