D1, Hedge Funds Face a Reckoning as Hot Bet Melts Down

The video discusses the challenges faced by hedge funds using private company stakes as collateral for borrowing. As valuations decline, funds like D1 and Tiger Global face potential losses. The video explores the exposure to illiquid assets, leverage, and the practice of side pocketing. It also covers how funds mark and value investments, with some marking quarterly. Despite challenges, macro and multi-strategy funds show success due to diversification and market-neutral strategies.

What strategy did Capital Partners use to post massive gains?

• Investing in public companies

• Using private company stakes as collateral

• Investing in real estate

• Focusing on currency trading

What is a common practice for hedge funds when dealing with illiquid assets?

• Public auctions

• Immediate liquidation

• Daily valuation updates

• Side-pocketing

How often do hedge funds typically mark the value of their private investments?

• Annually

• Quarterly

• Weekly

• Daily

Which type of hedge funds are seeing success due to their diversified strategies?

• Single-stock funds

• Macro and multi-strategy funds

• Commodity funds

• Real estate funds

What is a characteristic of market-neutral funds?

• They aim to trade independently of market trends

• They focus solely on currency trading

• They only invest in private companies

• They are highly volatile