FM230: Alternative Investments

In an era of significant institutional and individual market turmoil, investors must look beyond traditional investment vehicles such as bonds and shares.

A substantial increase in the price of gold is just one example of a successful alternative investment at work. From hedge funds and private equity, to venture capital funds, real estate and commodities, this course explores how alternative investments can be used as vehicles for growth.

Through a combination of theory and application through empirical exercises, this course allows you to gain practical experience in alternative investments. You will learn to identify what the return-risk characteristics of alternative investments are, what drives their appeal, how to understand related technical publications, and how to construct a portfolio using them.

Through interactive classes that allow you to get hands-on experience using data, you will apply the theory to real-world situations including measuring the risks of investment portfolios, evaluating a leveraged buyout deal and analysing the profitability of a venture capital deal.

Prerequisites: Basic mathematics and statistics. Introductory Finance (to the level of FM250) or Introductory Microeconomics (to the level of EC101).

Level: 200 level. Read more information on levels in our FAQs

Fees: Please see Fees and payments

Lectures: 36 hours

Classes: 18 hours

Assessment: Two examinations

Typical credit: 3-4 credits (US) 7.5 ECTS points (EU)

Please note: Assessment is optional but may be required for credit by your home institution. Your home institution will be able to advise how you can meet their credit requirements. For more information on exams and credit, read Teaching and assessment

This course is ideal if you are wanting to pursue a career in the financial services industry or wish to develop your own investment portfolio. The course will help you develop practical approaches using industry examples that will prepare you for roles in finance, such as in hedge funds, venture capital, private equity or trading. It is equally applicable to develop the skills needed for further academic study in this field.

• Understand the return-risk characteristics of different alternative investments
• Apply the course theory to measure the risks attached to different investment portfolios
• Calculate the alphas of hedge fund strategies
• Evaluate a leveraged buyout deal and venture capital deal

The design of this course is guided by LSE faculty, as well as industry experts, who will share their experience and in-depth knowledge with you throughout the course.