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Hands-off
A private equity investment in which the investor contributes only capital - and not business know-how or management involvement - to the investee company. |
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Hands-on
A private equity investment in which the investor adds value by contributing capital, management advice and personal involvement. |
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Hard Circle
Prospective purchasers in a public offering of securities, listed in the book maintained by the lead managing underwriter, who are considered very likely to actually buy such securities. |
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Hard landing
Sudden collapse of the economy. |
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Hedge
A transaction that reduces the risk of an investment. |
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Hedge Fund
Typically closed investment funds located in non-regulated financial centres and which carry out transactions that other funds are not authorized to execute, i. e. short sales, purchase of securities on credit, large use of derivatives. |
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High Flyer
An investment ( shares, stocks, etc.) showing an exceptional increase in value. |
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Highly Confident Letter
A letter from an investment bank indicating that it is highly confident that it will be able to raise financing for a transaction without legally obligating itself to do so. |
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Hi-Lo Index
Moving average of the number of stocks that reach new highs and lows each day, used as a technical analysis tool for measuring the strength of the overall market. |
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Hockey Stick
A curve which shows the evolution of the earnings of a company poised for rapid growth. Also used to describe the Internal Rate of Return (IRR) of a Private Equity fund as it rises from negative to positive. |
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Holdback
A contractual condition in which money is withheld until a specified event occurs. |
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Holding Company
A corporation that owns the securities of another, in most cases with voting control. |
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Horizon IRR
The Horizon Internal Rate of Return (IRR) allows for an indication of performance trends in the industry. |
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Hurdle Rate
In private equity funds the return on investment which the manager must achieve before he is entitled to a share of the profit. |