Saturday, September 6, 2008

This blog was contributed by Christopher Faille, a reporter (formerly with Thomson Reuter’s HedgeWorld) and an expert on activist investing. Chris also maintains an interesting blog about the struggle for control of corporations

Today’s entry for our blog reviews a new book titled, Encyclopedia of Alternative Investments, ed. Greg N. Gregoriou, CRC Press, Boca Raton , Fla. , 2008, 541 pp, $199.95 (cloth).

We look forward to receiving regular updates from Chris on what he sees happening with activist investing around the world.

The 545 entries in this single volume reference work will answer that many questions about hedge funds, funds of funds, managed futures, commodities markets, and venture capital.

Some of the entries are quite brief. The term “oversold,” for example, gets a straightforward definition in 65 words.

Other entries are elaborate, mini-articles, such as the 400 words, two charts, and concise bibliography accorded to “implied volatility.” Such entries go far beyond what one finds in the standard online glossaries devoted to the jargon of investments, traditional or alternative.

Readers of this blog inclined to browse might open first to the entry on “activists.” They’ll find that it breaks no new ground – but of course it isn’t the function of an encyclopedia to break new ground. That entry, by Dieter G. Kaiser, defines the term then summarizes recent research concluding that activist investors' demands are met (board representation secured, share repurchase programs initiated, etc.) more than 60% of the time. It is also generally to the benefit of shareholders when they are.

Mr. Kaiser notes, too, a study in the German markets that concluded that the beneficial “long-term wealth effects created by private equity investors are significantly higher than those of hedge fund activists.”

There are 16 members of the editorial board, each of them quite distinguished Рamong them Josh Lerner of Harvard University and Fran̤ois-Serge Lhabitant of the University of Lausanne, Switzerland. There are more than a hundred contributors. But the captain of this ship is Greg Gregoriou, professor of finance, State University of New York, Plattsburgh .

Reviewed by Christopher Faille