Overview

This is Module 12 of the Henley Executive Hedge Fund Program (HEHFP), which addresses Ethics. It provides a brief history of Ethics, introduces the factors that humans have considered over time when making ethical decisions. The concepts of Empathy, Prosocialness, Reciprocity and Fairness are introduced. The module also covers practical ethics for a hedge fund, and how ethics can be structured into a hedge fund using tools such as a Code of Ethics.

This module is a 3-hour (approx. study time) course and is eligible for 1.5 SFC CPT/PWMA OPT hours.

Check out the other modules in the Program:

• Module 1: Overview of the Hedge Funds Industry
• Module 2: Structuring & Setup
• Module 3: Capital Raising & Investor Relations
• Module 4: Portfolio Management
• Module 5: Portfolio Risk Management
• Module 6: Markets and Trading
• Module 7: Prime Brokerage Services
• Module 8: Business Management & Fund Administration
• Module 9: Operations and Technology
• Module 10: Operational Risk Management & Operational Due Diligence
• Module 11: Legal
• Module 13: Compliance
• Module 14: Fund Governance
• Module 15: Tax, Audit & Accounting
• Module 16: Human Resources
• Module 17: Pitchbook Formation

Objective

By the end of this module, you will be able to:
- Explain what ethics, conduct and conduct risk are
- Describe the brief history of ethics
- State practical steps to create a Code of Ethics for Hedge Funds

Content

Part 1 - Pre-reading materials
(i) Video/article about Empathy
(ii) Ethics of Insider Trading
(iii) Social Signals that can suppress ethical behaviour
(iv) Opacity and Transparency
(v) Duping Investors and Market Manipulation
(vi) Spruce Alpha case
(vii) Herbalife case
(viii) Vote-buying and managed arbitrage
(ix) Risk transfer
(x) Risk Magnification or copycat risk
(xi) Compound effect on investor returns
(xii) Ethical considerations in real estate debt transfers

Part 2 - Presentation Slides of the eCourse

Part 3 - Ethics eCourse*
(i) Introduction
(ii) Section 1- What are Ethics?
(iii) Section 2 - Where Do Ethics Come From?
(iv) Section 3 - Practical Ethics for Hedge Funds
(v) Section 4 - Making IT Real: Codes of Conduct & Ethics
(vi) Concluding Remarks

Part 4 - Quiz*
The quiz consists of 15 questions where learners have 3 attempts to achieve at least 80% with correct answers as a pass.

Part 5 - Post-reading materials
(i) Can Mining Ever Be Ethical
(ii) Who is Investing in the fund itself
(iii) Conflicts of Interest in Parallel Funds
(iv) Seven Pillars Institute
(v) DDQ for Responsible Investing
(vi) Simple Psychology
(vii) Cultural reform in banking
(viii) Kevin Money Prof. of Reputation and Responsibility
(ix) Hedge Fund Ethical Risks
(x) CFA interview with Michael Woodford
(xi) Frans de Waal video
(xii) Article on self-driving car
(xiii) Philosophy
(xiv) The Good Place
(xv) Links to Growth in Ethical investing strategies and increasing focus on ESG
(xvi) List of suggested books for further reading

* mandatory parts to complete

Who should attend

(1) Hedge Fund professionals seeking to enhance their knowledge
(2) Individuals looking to start a Hedge Fund
(3) Service providers e.g., Banking, Risk, Compliance and IT professionals, Lawyers, Fund Administrators