Alternative investments

Broaden your finance career and explore the world of alternative investments. Understand why and when you should (or should not) invest in hedge funds, commodities, private equity or real estate.

To build a successful career in the financial industry, it is essential to understand investment opportunities beyond traditional stock and bond markets. This minor introduces students to the world of alternative assets, including hedge funds, commodities, private equity, and real estate, areas that increasingly shape modern investment practice.

The course builds students’ understanding of these markets through academically rigorous content enriched with insights from industry professionals, ensuring a strong connection to real-world investing. We begin with core financial theories, covering risk-return trade-offs, market efficiency, and asset pricing models such as the CAPM. An Excel workshop equips students with practical skills to calculate returns, measure risk, and build optimized portfolios.

The course then explores major alternative asset classes in depth following the CAIA curriculum (Chartered Alternative Investment Analysts Association). The hedge fund module examines their role in financial markets and evaluates strategies and performance. The real estate module covers market fundamentals and key valuation techniques, including income-based, DCF, and sales comparison approaches. The commodities module explains futures markets, price dynamics, and the diversification benefits of commodity exposure. The private equity module outlines industry structure, return measurement, and how venture capital and buyout investments create value.

Across all modules, students assess risk and return, construct portfolios that combine traditional and alternative assets, and evaluate how these investments can enhance overall portfolio performance.

• Understand and explain the theories underlying traditional investments (in stocks and bonds) and a range of alternative investments (e.g. hedge funds, real estate, commodities, and private equity).
• Understand and determine the return and risk characteristics and their trade-off of traditional investments and a range of alternative investments.
• Create portfolios consisting of traditional and/or alternative investments and to determine their performance.
• Determine whether and which (traditional and/or alternative) investments adds value to an existing portfolio.
• Use Excel to construct, calculate, and evaluate the performance of portfolios consisting of traditional and/or alternative investments

This minor examines alternative investment markets from both an institutional and quantitative perspective and makes regular use of mathematical concepts and formulas. Students are therefore expected to have a solid understanding of basic mathematics and statistics (including distribution theory) at the bachelor level. Familiarity with core financial concepts, such as stocks, bonds, interest rates, and discounting, is also important. For students without a prior finance background, a short set of online introductory videos will be provided. Prior experience with Excel is helpful but not mandatory.
It might be hard(er) to pass the minor or to pass the minor with a good grade without any prior knowledge on finance and statistics, and when engaging in other activities (e.g. other courses, jobs, internships, being a 2nd year student, etc.) during the minor.

Teaching methods
The course consists of interactive lectures (including guest lectures), a workshop in Excel, and a number of discussion sessions in small groups. Attendance to all lectures is mandatory. To bring students at the required level, some core concepts will be covered in online videos (to be studied before the start of the course).For this minor, students are allowed to miss three lectures (with or without reason). Missing more than three lectures will result in failing the course.

Teaching materials
Compulsory: textbook, various academic articles, and/or industry reports.
Further details will be announced on Canvas at the start of the course.

Method of examination
A written test (with open questions) that counts for 60% of the final grade, and several group assignments that together count for 40% of the final grade.
The final grade for the course is a weighted average of the written test with open questions and assignments.

Composition final grade
The final grade for the course is a weighted average of the written test with open questions and group assignments. Note that all partial grades are only valid for the current academic year. In order to pass the course a final grade of 5.5 is required. In order to obtain a final grade you need to score at least 4.5 on the written test. There is a resit opportunity for the written test but not for the assignments.