Hedge Fund Accounting Certification Course

Why select this training course?

All entities experience some form of market risk ranging from foreign exchange, interest rate, and commodity risk. For instance, borrowers can be susceptible to high-interest rates, road transport companies hiking fuel prices, and importers and exporters to exchange rate risk. The process of hedging accounts varies for different hedges.

Why do financial institutions make use of hedge accounting?

Many financial institutions use derivative financial instruments to hedge their exposure to market risks. Hedge Fund Accounting then ensures that the volatility caused by the repeated adjustment to a financial instrument’s value, also regarded as fair value accounting, is reduced.

What is hedge fund accounting?

Hedge Fund Accounting is an accounting method that requires treating entries to adjust the fair value of a security and its opposing hedge as one. Hedge Fund Accounting involves overseeing the payments of hedge fund fees and expenses and preparing reports for fund managers and investors.

The Hedge Fund Accounting Certification Course by Rcademy will examine accounting for fair value hedges, cash flow hedges, and net investment hedges. This hedge fund accounting course also overviews hedge funds, carried interest, accounting entries, interest rates, and NAV calculation. This Rcademy course will expose you to hedge funds’ accounting and recordkeeping responsibilities and their cash flows.

Who Should Attend?

The Hedge Fund Accounting Certification Course by Rcademy is ideal for the following set of professionals:

• Senior management personnel: involved in overseeing the payments of hedge fund fees
• Hedge fund accountants: interested in improving their knowledge of hedge fund accounting best practices
• Accountants and other finance professionals: interested in pursuing a career in hedge fund accounting
• Hedge fund managers/consultants: involved in the hedge fund accounting process
• Investors: who want to have a thorough understanding of hedge fund accounting
• Personnel: interested in pursuing a career in the hedge fund industry

What are the course objectives?

Upon completion of The Hedge Fund Accounting Certification Course by Rcademy, participants will be able to:

• Understand hedge funds and the basic financial structure and process of hedge fund accounting
• Establish the correlation between the hedge and hedged items and record the returns and losses in other comprehensive income
• Identify distinct accounting issues for hedge funds ranging from trade booking and corporate actions and reconciliation process
• Apply the necessary skills and expertise required to devise investment strategies and improve various operations of hedge funds
• Handle the payment of hedge fund fees with mathematical precision.
• Recognize fundamentals of accounting issues for hedge funds
• Prepare hedge fund accounting documentation and assist with the accounting treatment of the results
• Calculate the market values of the underlying risks and the hedge instruments and account for the net asset value of the fund, dividends, and interests
• Learn about accounting and taxation concepts of hedge funds

How will this course be presented?

The content of this course is customized to be theoretical and practical oriented as it combines self-paced video lessons, notes, online resource materials, seminar workshops, and real-life case studies to expensively cover hedge fund accounting. Trainees should also expect participation and interaction to be an integral part of the training as they are encouraged to undertake the practical exercises, quizzes, and group discussions. This Rcademy course is created to suit the target audience, and it is facilitated by experienced professionals who have garnered relevant expertise and knowledge in hedge fund accounting. This course also provides a platform for constant communication between professionals undertaking the training and the trainees.

What are the Topics Covered in this Course?

Module 1: Overview of Hedge Fund

• Definition of Hedge Fund
• History of Hedge Fund
• Characteristics of Hedge Fund
• Parties to a Hedge Fund
• Aims of Hedging
• Classic Strategies in Hedge Fund
  – Event-driven strategy
  – Market Neutral
  – Long /short equity
  – Global macro strategy
  – Fixed-income arbitrage
  – Merger Arbitrage strategy
  – Convertible Arbitrage
  – Directional strategy
• Major Hedge Funds
  – Renaissance Technologies
  – Bridgewater Associates
  – Two Sigma Investments
  – AQR Capital Management
  – Elliot Management

Module 2: Overview of Hedge Fund Accounting

• Introduction
• Meaning of Hedge Fund Accounting
• Purposes of Hedge Fund Accounting
• Advantages and Disadvantages of Hedge Fund Accounting
• Asset categories that are suitable for Hedge Fund Accounting
  – Commodity exposures
  – Foreign currency exposures
  – Interest rate exposures
• Types of hedges suitable for Hedge Fund Accounting
  – Fair Value Hedges
  – Cash Flows Hedges
  – Net investment hedge

Module 3: Accounting for Fair Value Hedges

• Meaning of fair value hedges
• Purpose of fair value hedges
• The procedure of hedging fair value hedges

Module 4: Accounting for Cash Flows Hedges

• Meaning of cash flow hedges
• Purpose of cash flow hedges
• The procedure of hedging cash flow hedges

Module 5: Accounting for Net Investment Hedges

• Meaning of net investment hedges
• Purpose of net investment hedges
• Process of hedging net investment hedges

Module 6: Components of Hedge Fund Accounting

• Hedging instrument
• Hedging item
• Identify risks associated with hedging the selected asset categories
• Hedge effectiveness
• Risk management strategy

Module 7: Principles of Hedge Fund Accounting

• Professional management
• Diversification
• Economics of sale
• Choice and Flexibility
• Liquidity

Module 8: Hedge Relation

• Meaning of hedge relation
• Process of hedge relation
• Types of hedge relation
  – Fair value hedges
  – Cash flows hedges
  – Hedges in a foreign operation
• Termination of Hedge Relation

Module 9: Criteria for a Hedging Relationship to Qualify for Hedge Fund Accounting

• The hedging item and hedging instrument must be identified and designated at the start of the hedge
• Before the commencement of the hedge
• Testing the effectiveness of the hedge relationship

Module 10: Hedge Effectiveness

• Meaning of hedge effectiveness
• Criteria for calculating hedge effectiveness
  – Economic relationship
  – Credit risk
  – Hedge ratio
• Testing hedge effectiveness under IAS 39
  – A prospective test
  – A Retrospective test
• Testing hedge effectiveness under IFRS-9
  – Critical terms comparison
  – Monte Carlo simulation method
  – Dollar offset method
  – Linear regression analysis

Module 11: Hedge Fund Accountant

• Who is a Hedge Fund Accountant?
• Roles and Responsibilities of a Hedge Fund Accountant
• Hard skills required of a Hedge Fund Accountant
  – Analytical skills
  – Computer proficiency
  – Mathematical comprehension
  – Industry knowledge
• Soft skills required of a Hedge Fund Accountant
  – Active Learning
  – Critical Thinking
  – Time Management
  – Communication Skills

Module 11: Hedge fund accounting and Taxation

• Carried Interest
• Reinsuring
• Offshore funds
• Master feeder structure
• Bermuda

Module 12: Net Asset Valuation (NAV)

• Meaning of NAV
• Purpose of NAV
• NAV Cycle
• How to calculate NAV