Due diligence is an important source of alpha in a well designed hedge fund portfolio strategy. It is generally understood that the high returns possible in investing in hedge funds are somewhat offset by the relative lack of transparency on operational issues. The performance of a diversified hedge fund portfolio can be enhanced by excluding those funds likely to do poorly -or fail -due to operational risk concerns. However, effective due diligence is an expensive concern. This implies that there is a strong competitive advantage to those funds of funds sufficiently large to absorb this fixed and necessary cost. The consequent economies of scale that we document in funds of funds are quite substantial and support the proposition that due diligence is a source of alpha in hedge fund investment.JEL Classification: G1, G2
New efforts are underway to develop thermoelectric materials for cooling of infrared detectors at cryogenic temperatures. In this study, a control thermodynamic model of multistage Thermoelectric (TE) cryocoolers is developed that includes the effect of heat transfer between the cryocooler and the thermal reservoirs as well as thermal resistance between the stages. It is assumed that a reservoir at 80 K is available and a cooling load at about 35 K, typical of the second stage of conventional cryocoolers, is desired. It is shown that under the assumption of availability of TE materials with a reasonably high figure of merit, a multistage TE cryocooler is required. As an example, a control thermodynamic model of a four-stage TE cryogenic refrigerator is developed. The effect of thermal conductance of the heat exchangers at the hot and cold sides of the refrigerator, the thermal resistance between the stages and the effect of the figure of merit of the TE material on the cooling capacity and efficiency of the multistage TE cryocooler is presented. The thermal design challenges of the development of multistage TE cryocoolers with high efficiency for cryogenic applications including the effect of heat leak are discussed.
A control thermodynamic model for a two-stage Pulse Tube Refrigerators (PTRs) is developed based on exergy flow in the refrigerator. The model includes flow conductance, heat transfer effectiveness, and conduction heat transfer parameters for regenerators in both stages. It is assumed that a phase shift controller exists in both stages to control the phase shift between the pressure and mass flow rates that can control and optimize the performance of the refrigerator. The effects of the allocation of the values of flow conductance and ineffectiveness parameters in the regenerators, the mid-stage temperature, and the phase shift in each stage on the performance of the refrigerator are investigated. Important dimensionless parameters controlling the thermodynamic performance of twostage PTRs, including a model to quantify the magnitude of different components of irreversibility in the regenerators, is developed and discussed.
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