Hedge Funds Simulation

The Hedge Funds Simulation immerses students in the high-pressure environment of hedge fund management, challenging them to develop, implement, and adjust trading strategies in pursuit of absolute returns. Participants take on the role of hedge fund managers, using real-time market scenarios to make active portfolio decisions, manage risk exposure, and communicate fund performance to simulated investors.

Students explore a variety of hedge fund styles - from long/short equity and event-driven to global macro and quantitative strategies - allowing them to test diverse investment theses in a dynamic, data-driven environment. The simulation emphasizes agility, discipline, and performance accountability, making it a valuable training ground for aspiring fund managers, traders, and research analysts.

• Long/Short Equity Strategy
• Market Neutral Investing
• Global Macro and Thematic Trades
• Event-Driven and Special Situations
• Risk Parity and Volatility Targeting
• Portfolio Construction and Position Sizing
• Leverage and Margin Management
• Performance Attribution and Benchmarking
• Hedge Fund Fee Structures (2-and-20 Model)
• Drawdown and Liquidity Risk Management
• Strategy Backtesting and Alpha Generation
• Investor Reporting and Fund Marketing

During the hedge funds simulation, students engage in the following tasks to develop and apply hedge funds skills:

• Develop Hedge Fund Strategies: Select and refine investment strategies based on market outlook.
• Construct Long and Short Positions: Manage net and gross exposure dynamically.
• Respond to Market Events: Adjust portfolio positions in reaction to earnings, news, and macro developments.
• Measure Alpha and Beta: Evaluate performance using industry-standard metrics.
• Manage Leverage and Risk: Monitor drawdown limits, volatility targets, and liquidity needs.
• Analyze and Attribute Performance: Identify key drivers of return and areas of underperformance.
• Backtest Strategies: Use historical data to validate investment hypotheses.
• Pitch Fund to Investors: Present strategy, track record, and risk controls to a simulated LP audience.
• Evaluate Competitor Funds: Benchmark against industry peers using returns and risk-adjusted metrics.
• Adapt to Investor Redemptions: Adjust allocations in response to capital inflows and outflows.

• Strategy Differentiation: Understand the risk-return profiles of multiple hedge fund styles.
• Active Risk Management: Build processes to monitor and mitigate downside risk.
• Dynamic Portfolio Management: Gain experience rebalancing portfolios in response to shifting markets.
• Performance Analysis: Learn how to break down returns into alpha, beta, and other components.
• Quantitative Reasoning: Strengthen data interpretation and modeling in investment decisions.
• Investor Relationship Skills: Improve ability to communicate fund performance and justify decisions.
• Operational Awareness: Understand the role of leverage, liquidity, and fees in fund operations.
• Ethical Fund Management: Explore topics like disclosure, fair dealing, and fiduciary responsibility.
• Competitive Strategy: Learn how funds position themselves to attract capital.
• Industry Readiness: Develop the practical skills needed to succeed in hedge fund and asset management roles.

The Hedge Funds Simulation replicates the dynamic and pressure-filled world of active fund management, offering an unmatched opportunity to practice the decision-making, discipline, and performance focus that define hedge fund careers. It combines rigorous financial modeling with real-time portfolio management, allowing students to test ideas, refine execution, and see results unfold through changing market conditions.

By blending risk management, investor communication, and strategy design, the simulation mirrors the multidimensional reality of working at a hedge fund. It builds fluency in investment language and discipline while encouraging innovation, critical thinking, and accountability. Ideal for advanced finance students, this simulation bridges theory and real-world application in a way few classroom activities can.