SVKM’s

NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES

POST GRADUATE DIPLOMA IN MANAGEMENT
Program: PGDM Trimester: VI
Course: Alternative Investment Code:
Markets (AIM)
Teaching Scheme Evaluation Scheme
Classroom Practical/ Tutorials Credit Continuous Term End Examination
Sessions Group Evaluation (TEE)
work
20 3 50% 50%
Course Rationale:
Traditionally investors invest majority of their wealth into conventional asset classes stocks, Bonds, Stocks,
Mutual Funds, SIPs and Bank Deposits. The Alternative Investment Industry is evolving every day and newer
investments are entering the fray, providing the investor with increased array of alternatives. Surveys conducted
in the current millennium have indicated an increased willingness among institutional and individual high net-
worth investors (HNIs) to assign a higher allocation to alternative assets in order to diversify their portfolio.
This is due to the poor returns generated by traditional asset classes in the recent past. It is expected that the
proportion of investment into alternatives will further increase in the coming years.
In the light of the increased interest among investors, this course aims to provide an introduction to the world of
Alternative Investments and equip participants with the current practices in the alternative investment space. It
enables the candidates to explore careers in Hedge Funds, Private Equity & Venture Capital, Real Estate,
Commodity Brokerages and Crypto Trading.

Course Objectives:
1. Introduce the participants to advanced area of alternative investment asset classes;
2. Discuss the structure of each of the components of Alternative Investments
3. Examine the Alternative Investment market, appropriate benchmarks, historical performance, specific
investment strategies,
4. Help understand the issues pertaining to performance and reporting of each of the alternative asset classes.

Learning Outcomes:
On successful completion of the course, a participant would be able to:
1. Appreciate the nature of various alternative assets and their importance in an investment portfolio;
2. Evaluate the risk and returns of each of the "Alternative Investment Asset Classes"
3. Evaluate Hedge Fund strategies and Fund selection;
4. Analyze Private Equity and Real Estate investments, including REIT and InvITs
5. Analyze various issues in the Venture Capital industry
6. Analyze credit derivatives and commodity futures

Prerequisite(s):
 Corporate Finance with a grade of ‘B’ or higher;
 Preferably Investment Analysis & Portfolio Management, Derivatives;
 A thorough understanding of Spreadsheet applications in Finance, Portfolio Modeling, Hedging strategies
with Derivatives, and functioning of Investments Banks would help the students to participate well in the
course.

Pedagogy:
A mix of pedagogy would be adopted, short lectures, Case Studies, Assignments, Quizzes, Readings etc.
participants are expected to spend 3-4 hours on preparation for each classroom session; about 75% of the time
will be required for pre-class preparation and about 25% for post-class revision. 
Textbook:
 Handbook of Alternative Assets, 2e, Anson, Mark, J.P, John Wiley & Sons, NJ, 2006

Reference Books:
 Investment Banks, Hedge Funds and Private Equity, 3e, Stowell, David,P, Academic Press, 2017
 The Little Book of Alternative Investments: Reaping Rewards by Daring to be Different, 1e, Stein, Ben,
DeMuth, Phil, John Wiley & Sons, 2011
 The Only Guide to Alternative Investments You'll Ever Need: The Good, the Flawed, the Bad, and the
Ugly,1e, Swedroe, E. Larry, Kizer, Jared, Bloomberg Press, 2008
 The Principles of Alternative Investments Management: A Study of the Global Markets, 1e, Sokolowska,
Ewelina, Springer, 2015.

Journals:
 Journal of Alternative Investments,
 Journal of Asset Management,
 Journal of Portfolio Management
 Institutional Investor PLC
 Financial Analysts Journal
 Euromoney, Economist, Financial Times, and Bloomberg Markets

Links to websites:

Evaluation Scheme:
 Assignments/ Presentations 20%
 Project Work (Group) 20%
 Quizzes 10%
 Term-End Exam 50%
Total 100%

Session Plan:
Session Topic Learning Outcomes Pedagogical Tool Textbook Chapters
(including subtopics) & Readings
1 Overview of Alternative  Analyze various Class Discussion Textbook
Assets Alternative Case: Chapters 1-2;
investments and The Hedge Fund Reading:
appreciate the Industry Alternative
logic of # 9208126-PDF-ENG Investments 2020,
investing in Published 2008 An Introduction to
them; Revised 2010 Alternative
 Analyze the HBS Investments, World
need for alpha- Economic Forum
beta separation http://www3.wefor
um.org/docs/WEF_
Alternative_Invest
ments_2020_An_In
troduction_to_AI.p
df

2-3 Hedge Funds Analyze the Case: Textbook

 Introduction & difference between The Vanderbilt Chapters 3-4
Establishing a Hedge Hedge Funds and University Case:
Fund Mutual Funds, Endowment The Hedge Fund
Investment Program Demand for Hedge # 207062-PDF-ENG Industry
 funds and Hedge Published 2006 # 208126-PDF-
fund styles Revised 2007 ENG
HBS Published 2008
Revised 2010
HBS
4-5 Hedge Fund Risk  Eavlaute Hedge Case: Textbook
 Management Strategies fund return Kmart, Sears, and Chapters 6-7
distributions; ESL: How a Hedge
 Evaluate various Fund Became One of
hedge fund the World’s Largest
strategies Retailers
# KEL133-PDF-ENG
Published 2005
HBS
6-7 Hedge Fund Benchmarks  Analyze Case: Textbook
and Asset Allocation; Relative Lessons from the Chapters 9-10
Returns; Collapse of
 Hedge Fund Amaranth Advisors
Index LLC, Chincarini,
Constructions Ludwig (2008),
and It’s Journal of Applied
application; Finance,
 Analyze Hedge Spring/Summer,
Fund Incentive 2008
Fees & Free Vol 18. Issue 1, p
Option; 152-174.
Case:
Common Fund
Hedge
Fund Portfolio
#297014-PDF-ENG
Published 1996
HBS
8 Venture Capital  Appreciate the Case: Textbook
broad contours VC-PE Strategy Chapters 16
of Venture Vignettes Article:
Capital #812073-PDF-ENG Best Practices:
financing; Published 2011 Decision Making
 Eavlaute the HBS Among Venture
various Stages Capital Firms
of Venture #804176-PDF-ENG
Capital Published 2004
financing; Revised 2007
HBS
9-10 Private Analyze Mezzanine Class Discussion Textbook
Equity Investments debt and Distressed Case: Chapters 18-20
Debt Venture Capital and
Private Equity:
Module I
#297040-PDF-ENG
Published 1996
Revised 2011
HBS

Case:
Venture Capital and
Private Equity:
Module II,
#297041-PDF-ENG
 Published 1996
Revised 2011
HBS
Case:
Venture Capital and
Private Equity:
Module III
#297042-PDF-ENG
Published 1996
Revised 2011
HBS
Case:
Venture Capital and
Private Equity:
Module IV,
#297043-PDF-ENG
Published 1996
Revised 2011
HBS
Case:
Venture Capital and
Private Equity:
Module I
#297040-PDF-ENG
Published 1996
Revised 2011
HBS
Case:
Venture Capital and
Private Equity:
Module II
#297041-PDF-ENG
Published 1996
Revised 2011
HBS
Case:
Venture Capital and
Private Equity:
Module III
#297042-PDF-ENG
Published 1996
Revised 2011
HBS
Case:
Venture Capital and
Private Equity:
Module IV
#297043-PDF-ENG
Published 1996
Revised 2011
HBS

11 Leveraged Buyouts (LBO) Evaluate the risks The LBO Deal Dell- Textbook
and return Silver Lake: Chapter 17
associated with the https://scholars.unh.e
investment into du/cgi/viewcontent.c
LBOs as an gi?
alternative asset article=1155&context
 class. =honors
Case:
Michael Milken: The
Junk Bond King
# 816050-PDF-ENG
Published 2016
HBS
12 Investment Banks in IPO- Analyze the role of Class Discussion Ref book:
FPO-M&A transactions Investment banks as Case: Stowell-David
an intermediary in Ref book Chapter 3
the capital markets Case No: 3 Freeport
transactions – Mcmoran
involving VC-PE Financing and
and non VC-PE. Acquisition
13 Trends in Private Equity Case: Textbook
Truth about Private Chapters 21-22
Equity Performance
#F0712D-PDF-ENG,
Published 2007
HBS
Case:
Private Equity
Valuation in
Emerging Markets
#213043-PDF-ENG
Published 2012
Revised 2017
HBS
14 Commodities  Analyze the 5 Class Discussion Textbook
ways to get Case: Chapter 12
exposure to Note on Commodity
commodities; Futures
 Analyze the #293018 PDF-ENG
relationship Published 1992
between Futures Revised 1996
Prices & Spot HBS
Prices; Case:
 Understand the Commodity Futures
Economics of in India. Economic &
Commodity Political Weekly,
markets March 31, 2007,
 Evaluate 1163-1170
Commodity
prices - Financial
Asset prices
15 Investing in Commodity  Analyze the Class Discussion Textbook
Futures strategic reasons Case: Chapters 13-14
for investing in American Barrick
Commodity Resources
Futures; Corporation
 Analyze #293128-PDF-ENG
relationship Published 1993
between HBS
Commodities &
Business Cycle;
 Learn about
Commodity
Futures in a
 portfolio context;
 Examine
Commodity
Futures as a
Defensive
Investment;
16 Managed Futures  Understand the Class Discussion Textbook
history of Chapter 15
Managed futures;
 Analyze
Managed futures
in Agricultural
Commodities-
Currency
markets-
Financial and
Metals markets,
in a diversified
trading strategy,
and in a
portfolio context;
 Evaluate the
Alpha and Beta
drivers;
 Analyze
Managed futures
and downside
risk protection
for stocks and
bonds.
17 Introduction to Real Estate  Understand Class Discussion Crisil Report,
Investments various real Case: Crisil Insight,
estate Note on Real Estate August 2014
investments; Investments, http://www.crisil.co
 CMBS # 908N25-PDF-ENG m/pdf/ratings/Realt
 REITs Published 2009 y%20sector
 InvITs HBS %20headed%20the
Case: %20REIT
How Institutional %20way.pdf
Investors Think
About Real Estate,
#209152-PDF-ENG
Published 2010
HBS
Case:
Structuring Real
Estate Deals: An
Investor's
Perspective,
#208066-PDF-ENG
Published 2007
Revised 2009
HBS
18-19 Credit Derivatives:  Analyze Credit Class Discussion Textbook
 Three sources of credit option Case: Chapter 23
risk; derivatives, Saginaw Parts Co.
 Various Credit Credit put and the General
Derivative options, Motors Corp. Credit
  Credit Linked Default Swap
Notes (CLNs), #210056-PDF-ENG
Credit Default Published 2010
Swaps (CDS), HBS
Collateralized
Debt Obligations
(CDOs)
20 Crypto Currencies Analyze the basics Case: Article:
of Crypto Bitcoin: The Future The Truth About
Currencies like of Digital Payments Blockchain
Bitcoin, as an #714519-PDF-ENG #R1701J-PDF-
alternative Published 2014 ENG
investment asset HBS Published 2017
class. HBS