Hedge Fund Definition

Hedge Fund Risk Manager Jobs

2009-09-22T15:25:00.000-07:00

Risk management positions are hedge fund jobs associated with assigning objective numerical values to probabilities of negative financial events. A risk manager in a hedge fund job is responsible for calculating the risk associated with currently held portfolios in order to recommend changes, or assessing the risk on a potential investment to help the portfolio manager decide if the potential gain is worth the associated possible loss.

Risk management requires a strong preparation in business, accounting, and statistics, and advanced business degrees from recognized colleges or universities are a competitive advantage to individuals seeking these hedge fund jobs. Qualified risk managers in hedge fund jobs can expect a starting salary around $50,000, although salaries may be higher with larger or more successful funds. Risk managers will likely earn hundreds of thousands to millions of dollars over the course of a career.

Hedge Fund Accountant Jobs

2009-09-15T13:16:00.000-07:00

Hedge fund accountant jobs perform the crucial task of organizing and monitoring the flow of money through a hedge fund, maintaining accounts, making transactions, and keeping records of all exchanges. Accountants may also be responsible for the creation of monthly or quarterly reports for fund investors, and may be tasked with regulatory compliance as well. Keep in mind, this is not your typical accounting job. Just because you have 15 years of experience as a CPA, if you don't know alternative investments, you likely won't get the gig.

Accountants in hedge funds are generally expected to have a formal degree in accounting from a recognized business school, and prior experience in the finance industry, and with hedge funds in particular, is considered a strong advantage. Accountants in the hedge fund industry frequently start out in the $40,000 to $60,000 range, and may end up making $300,000 to $400,000 or beyond, if working for a large firm in a major metropolitan area.

Hedge Fund Portfolio Manager Jobs

2009-09-08T14:14:00.000-07:00

Portfolio managers determine what actions must be taken in order to maximize hedge fund profits according to their preferred hedge fund strategies. This hedge fund job is responsible for taking conclusions from market data generated by analysts, working with risk managers to determine how best to structure the investments, and issuing instructions to traders to make the sales and purchases necessary to build the value of the fund.

Portfolio managers will generally be expected to have earned advanced business degrees from accredited colleges, although experience and a profitable record in analysis, trading, risk management, or other hedge fund jobs is considered far more important. Portfolio managers are not necessarily paid in terms of a regular salary, but rather are the recipients of hedge fund management and performance fees, which tend to be two percent of the total fund assets and twenty percent of the profit yields respectively. The amount of compensation for this hedge fund job is therefore limited only by performance and scale, and in extreme cases may register in the billions of dollars (yes, that's billion with a B).

Hedge Fund Trader Jobs

2009-09-02T13:07:00.000-07:00

Traders are responsible for the actual buying and selling of financial products, as well as certain aspects of the research, analysis, and due diligence required for profitable transactions. The hedge fund trader is the person who executes the firm's overall investment strategy. Traders must maintain relationships with other brokers and firms, have a good understanding of the market and a thorough mastery of the areas in which they specialize, and have a strong awareness of issues, trends, and events currently impacting the financial industry.

Hedge fund traders are at the center of the investment firm. Quantitative analysts (also known as "Quants") work alongside traders, building trading models using computational mathematics and complex financial modeling. Trading jobs often require experience in portfolio management and various risk and financial models. Although nothing beats outstanding trading success, many hedge fund trading jobs require a background in statistics and those from the top MBA and Financial Engineering programs tend to get first pick of the available hedge fund offers.

Hedge fund trading jobs typically require either a business degree from an accredited university, or successful hedge fund experience, with a strong preparation in statistics being extremely beneficial. Trader salaries vary greatly depending on what company they work for and in which city they work, but base salary ranges reach between $40,000 and $80,000. Upper salary ranges for successful traders may range into the millions, with performance bonuses adding significantly to a trader's compensation package.

Hedge Fund Third Party Marketing

2009-08-26T07:43:00.000-07:00

Third Party Marketing, in the context of a hedge fund definition, refers to a set of sales and marketing services offered to hedge fund managers by specialized marketing firms. Provided services may include the production of marketing materials such as pamphlets and spreadsheets, the management of advertising in media, analyzing investment market statistics, and customer relations management. Third party marketing is also crucial to the hedge fund industry due to regulations that forbid hedge fund managers and managers of other unregistered funds from advertising directly to investors. These firms are essential to raising capital for fund startups and to publicizing the fund in order to grow the investor base. By building up hedge fund specific marketing expertise and contacts, third party marketers provide hedge fund managers with the ability to reach out to investors much more efficiently than would be possible for a fund attempting to publicize itself individually. Third party marketing firms in essence create a private marketplace for hedge fund investments.

The role of third party marketing firms is to serve as a bridge between fund managers and potential investors. Third party marketing firms can offer recommendations, contact assistance, and comparative ratings of hedge fund risk ratings, performance in the market, and fee structures. By helping to determine hedge funds worth investing in, third party marketing firms provide increased confidence to investors which, in turn promotes greater participation in hedge funds. The collecting and publishing of hedge fund management data and performance statistics also provides to the investor a level of transparency that would otherwise not be available based on government regulation.

In exchange for raising assets and managing client relations, third party marketing firms typically charge a percentage of both the management and performance fees received from assets facilitated by the third party marketing firm. This amount is generally around twenty percent, but may be much higher for smaller hedge fund companies, to compensate for the expectation of smaller returns. In addition to the fees levied as a percentage of fees paid by investors, third party marketing firms may charge a monthly retainer to be paid by the hedge fund management company. In the case of smaller (and often younger) hedge funds, or funds still in the start-up stages, the retainer may take the form of equity in the fund itself.

Third party marketing of hedge funds is very similar to another service offered by some firms, known as capital introduction. Both third party marketing firms and capital introduction firms will introduce potential clients to hedge funds seeking investors, performing the dual service of marketing the funds to the customers and providing recommendations as to the profitability of those funds backed by the reputation of the firm. However, while helping funds to make contact with clients is generally the extent of a capital introduction firm's service offering, third party marketers will often work with the client and the fund to help close the deal, and will also offer fund progress updates and consultation services throughout the life of the investment.

Hedge Fund Analyst Jobs

2009-08-20T18:00:00.000-07:00

Research analysts employed in hedge fund careers are responsible for analyzing data on overall market trends, the performance of assets that are currently held by the fund, assets under consideration for purchase, the decisions and performance of corporations in which the fund has a vested interest, and many other factors, in order to determine the best hedge fund strategies to maximize returns for the fund. To qualify for hedge fund analyst jobs, you must understand the many investment vehicles, including stocks, commodities and t-bills.

Analysts may use quantitative methods, determining strategies by employing statistical software to analyze market numbers, or qualitative methods, where decisions are reached by studying past trends, current indicators, and the history of the market in general, and the characteristics of the assets under consideration. Research analyst jobs usually require strong computer skills, a business degree with a strong statistical background, and strong academic performance or several years prior experience.

What we've found is that the educational background of hedge fund analyst jobs varies, but it is common to see analyst job descriptions requiring MBA or other advanced degrees from well-respected universities.

Research analysts will often start out making $30,000 to $40,000 as a base salary, and depending on performance and the size of the company, eventually earn hundreds of thousands of dollars.

More Hedge Fund Trading Strategies

2009-08-18T11:52:00.000-07:00

Event Driven

Event driven strategies focus on temporary value changes produced by one-time events such as mergers, bankruptcies, and corporate restructuring. Analysts in hedge fund jobs using this strategy will often identify imbalances in the value of financial instruments such as stocks or debt products, such as a temporary increase in the stock price of a company being taken over, or a disproportionate drop in the share price of a company rumored to be in danger of bankruptcy. In these cases, the fund may acquire and quickly resell shares in a company to take advantage of the imbalance, or short-sell shares of companies expected to temporarily decrease in value. Event-driven transactions are bets on the outcome of a particular corporate action, and therefore tend to involve some risk if the event does not take place as planned. Some event-driven hedge funds also engage in activist strategies, which involve purchasing sufficient shares of the company in order to affect strategic decisions by the company, and acting upon the resulting market changes.

Arbitrage Strategy

Relative value, or arbitrage, strategies are employed by hedge funds that specialize in transactions across value differentials between types of related financial instruments. These transactions generally involve betting that one valuation of a financial product is either higher or lower than the potential valuation of a related product, resulting in a hedged position with profit potential. An example of this strategy would be a hedge fund manager that short-sells the stock of a given company, while purchasing that company's debts, under the assumption that the stocks are overvalued relative to the value of the debt. If the manager is correct, this valuation gap yields a small but definite profit resulting from the difference between the short-selling yield and the sale of the company stock, while hedging the transaction in case the assumption turns out to be wrong. Another example would be buying shares of a company on one exchange, and selling them immediately on another exchange where the price was higher, producing immediate profit at no risk.

All of these hedge fund strategies may be employed separately or in combination by different funds, in order to further mitigate risk through strategy diversification. Further, some hedge funds, referred to as funds of hedge funds or multi-manager funds, hedge risk by investing assets in multiple hedge funds in order to take advantage of a diversity of strategies chosen by specialists in each strategy used. There are even funds of funds of hedge funds, also called F-cubed, which mitigate risk by investments in multiple funds of hedge funds. Depending on each fund's investment strategy, this approach can either lessen or increase overall risk.

Hedge Fund Trading Strategies

2009-08-14T13:48:00.000-07:00

The wide array of types of investments available to hedge fund managers, by virtue of the privileged regulatory status accorded to these funds, yields a variety of strategies from which to choose. Determining what is a hedge fund strategy that will produce the best possible returns within the risk tolerance of the investor base of the fund is a hedge fund job requiring considerable experience and financial expertise.

Determining a portfolio that will provide the best returns within an industry or strategic category often depends on finding the most productive way to combine existing techniques, strategies, and financial instruments in order to maximize profits, resulting in a large number of individual approaches, but hedge fund strategies generally fall into four categories: Global macro, directional, event-driven, and relative value.

Global Macro

Global macro hedge fund strategies generally focus on the financial implications of global macroeconomic events, such as regional market behavior, inflation, and relative changes in currency values. This strategy derives profitability from careful analysis of large-scale trends, cycles, and market interactions. Trading done by global macro funds tends to be a combination of trading methods, consisting of systematic trading (where decisions driven by software analysis), and discretionary trading (where decisions made by investment managers). Hedge funds using this strategy tend to be highly diversified, containing variety of financial instruments such as commodities, currencies, or long equity positions, in order to take advantage of market trends.

Directional

Directional hedge fund strategies more closely resemble the original hedge fund definition, by virtue of balancing investments to mitigate risk and market uncertainty. Directional strategies focus on sustained longer-term gains rather than seeking to take advantage of events and changes in markets. Funds using directional strategies may focus on certain market sectors, such as technology or health care, or may focus on emerging markets in developing areas of the world in order to invest in long-term growth areas. Directional hedge funds are likely to include long equity positions hedged with short positions, to cancel out short-term uncertainty. Sometimes these funds specialize in identifying and short-selling overvalued assets.

Hedge Fund Jobs

2009-08-11T13:56:00.000-07:00

Hedge fund careers provide a chance to learn many aspects of investing and financial management, and develop your financial modeling skills. Competition for hedge fund jobs within the industry is high and the job hunt can be challenging. Once in a hedge fund job, the earnings can be significant, ranging into millions of dollars per year. Longevity with a requires solid performance in good and bad markets.

According to Forbes, timing for hedge fund jobs is good...

The Obama administration's new executive pay guidelines for banks receiving Troubled Asset Relief Program (TARP) money, the merger of smaller investment funds, funds being acquired by bigger banks, and downsizing at traditional investment banks, have all conspired to create opportunities for financial services professionals at hedge funds, private equity firms and venture capital groups.

There are some online hedge fund job resources that will help you find a hedge fund opportunity, and provide career advice to help you create a resume with impact and prepare for a successful interview with a portfolio manager at a fund.

The variety of strategic approaches and financial techniques that make up the hedge fund industry requires the expertise of a number of different classes of financial professional to perform the analyses, transactions, and customer management that define hedge fund firms. Hedge fund jobs tend to be located in major cities with active markets, such as New York and London, and can be personally and financially rewarding for persons with strong financial backgrounds, exacting attention to detail, and a tolerance for high levels of risk, responsibility and stress. Research analysts, traders, portfolio managers, accountants, and risk managers are just a few examples of the hedge fund jobs that contribute to the success of this specialized aspect of the financial marketplace.

You will find wide ranges of earnings and that hedge fund bonuses vary based on experience and the particular firm. Often times, hedge fund managers will say how their bonus is calculated is somewhat disconnected from their individual performance. This disconnection can be found both in the United States and the United Kingdom, with the respective epicenters being New York and London. This size of the fund also plays a big role in determining compensation. Bigger is not always better. Hedge fund compensation studies have shown that funds over $500 million in assets under management tend to pay the highest. Smaller funds have difficulty building the original team because all too often, fund management fees are not high enough to compensation a large number of staff members.

Hedge Fund Management Fees and Compensation

2009-08-05T13:40:00.000-07:00

Direct management and strategic guidance are aspects of the hedge fund definition that set these funds apart from other types of shared investments, and enable them to take advantage of a broader range of financial transactions. One of the methods of compensating managing partners in hedge funds is the management fee, which was introduced as part of the first hedge fund compensation plans. Hedge fund performance fees are generally determined annually as a percentage of the net value of the fund, ranging from one percent to four percent, and are typically paid to the fund manager in quarterly installments. Smaller funds may determine this percentage by seeking to cover the operating costs of management of the fund, while larger funds may offer higher management fee percentages in order to attract and retain greater fund management expertise.

Performance Fee

In addition to management fees, hedge fund managers are also paid a performance fee, calculated as a percentage of the profits gained by the fund under their management. The performance fee is generally around twenty percent of the increase in value over a specified period of time, although some larger management firms have charged as much as forty percent of the profits. Because fund managers are rewarded with performance incentive fees based on net value gains, but are not penalized on losses, some limiting measures are employed by hedge funds as a means of competing for investors, such as high water marks and hurdle rates.

High Water Marks

High water marks refer to performance fee policies that specify that the fund manager will only be paid a percentage of the profits if the net value of the fund exceeds the previous highest value achieved by the fund. A manager of such a fund that has been valued at one hundred dollars a share one year, then eighty dollars a share the next year, would not receive a performance fee unless the value of the fund rose above the one-hundred-dollars-per-share high water mark previously established. This arrangement helps to provide additional incentive for managers to increase the values of funds, and offers increased assurance of good faith efforts at profitability to potential investors.

Hurdle Rates

Hurdle rates, also referred to as minimum acceptable rates of return, are also used as a determining factor for hedge fund performance fees, by measuring fund performance against an external benchmark. Where hurdle rates are applied, performance fee percentages are not paid to the fund manager unless the rate of return on the fund meets or exceeds that benchmark rate. The rates used for comparison may be a pre-determined percentage, or some other financial industry measure such as the rate of return on US treasury bills, or other rates of return in the financial industry. Guaranteeing that performance fees will not be levied helps to reassure investors that they will be compensated somewhat if the return fails to exceed that of other investment options. This guarantee also provides strong incentive to fund managers to ensure the growth of the value of the fund.

Withdrawal Fees

In addition to management fees and incentive or performance fees, some hedge funds also charge withdrawal fees when money is removed by an investor from a hedge fund account. These fees usually are applied to a certain time period, such as withdrawals within a set number of years of the initial investment, or to withdrawals above a certain amount, usually defined as a given percentage of the investment. Withdrawal fees are meant to discourage casual withdrawals from the fund assets, in order to allow fund managers to employ longer-term strategies. Other funds address this problem with lock-up periods, which refer to a minimum amount of time that must pass after the initial investment before the investor may withdraw money from the fund.

Hedge Fund Industry

2009-08-03T13:32:00.000-07:00

The rules governing hedge funds include a wide variety of investment groups and firms, many of which do not correspond to the original hedge fund definition, so the size of the hedge fund industry is difficult to determine exactly. Morningstar estimates around eight thousand active hedge funds worldwide, with the number increasing by hundreds of individual funds per year. The total monetary value of known hedge funds at the highest point in 2008 was over two trillion dollars, although the current values react sharply in response to changes in the investment markets.

While most investment funds are tightly regulated by the Securities Exchange Commission on the basis of being public, or available to general investors with no restrictions on income or financial status, the regulations applied to hedge funds are far less restrictive, partly by virtue of hedge funds being considered private funds, and being restricted to certain classes of investor as recognized by the SEC. In order for a fund to fall under the SEC's hedge fund definition as specified by exemption Section 3(c)(1) of the Investment Company Act of 1940, investors must be limited in number and must belong to one of two categories:

Accredited Investors

This class of investors is recognized by the SEC according to a specific list of criteria having to do with net worth or income. These investors may be natural persons (individual investors) or married couples, but may also be a trust, an employee benefit plan, a business entity made up of individual accredited investors, or an executive officer or partner in the firm offering the securities that make up the hedge fund in question. Financial restrictions on this class of investor, where applicable, may include a minimum net worth of one million dollars in the case of individuals or married couples, or five million dollars in the case of trusts or institutions, or a verified annual income in excess of two hundred thousand dollars, or, in the case of married investors, a combined annual income of at least three hundred thousand dollars. These restrictions help to define hedge fund participants as experienced enough to evaluate the level of risk assumed, and of sufficient financial soundness to weather any probably changes in market conditions or hedge fund performance.

Sophisticated Investors

This class of investors, while potentially not meeting the financial requirements of an accredited investor, is acknowledged by the SEC as qualified to purchase financial products where the level of risk may be above that recommended for typical investors. While not as strictly defined as the requirements for accredited investors, the requirements for sophisticated investors include net worth sufficient to hold on to purchased assets for an indefinite period of time, familiarity and past experience with investments of a similar nature, and a limitation on the value of the investment to ensure that it does not exceed twenty percent of the net worth of the investor. These restrictions are intended to define hedge fund investors who may safely invest in less-regulated areas of the market without reliance on governmental oversight.

Hedge Fund History

2009-07-31T08:18:00.000-07:00

The modern hedge fund was first developed by sociologist and writer Alfred W. Jones in the 1950’s. Jones had previously formed a shared investment fund to try out the technique of combining long positions (buying and holding stocks expected to increase in value) with short-selling (betting against a stock) in order to minimize long term risk. Jones converted his fund from a general partnership to a limited partnership and introduced an incentive system where the managing partner was rewarded with a percentage of the value gained by the fund, over and above the management fee. This structure set the template for what would become known as the hedge fund, and has been used to define hedge fund investments ever since.

The growth of the number of hedge funds was driven in part by the restrictions placed on other investment funds by federal regulations. The formation of regulatory legislation such as the Securities Act of 1933 and the Investment Company Act of 1940 were designed to protect everyday investors from the risks sometimes involved with sophisticated investment techniques, particularly higher-risk financial tools such as leverage and short-selling. Several of these acts set up and maintained requirements that investment funds and companies be registered with the Securities Exchange Commission (SEC) to enable regulators to monitor the activities of these funds, to ensure that restrictions on risky financial maneuvers were being observed, and that investment managers were handling their clients' investments responsibly.

Hedge funds, however, are exempt from several of regulations regarding transparency and financial practice. The hedge fund definition employed by the SEC includes the requirement that the investor base must be built of "sophisticated investors" or "accredited investors". These two groups, specified in law by fairly exact definitions, are entitled to participate in hedge funds by virtue of being able to demonstrate a certain level of wealth, which is assumed to reduce their vulnerability to the greater risks associated with hedge funds, or a certain level of investment experience. This level of experience implies that the investor can fully understand the extent and nature of the risk assumed by a hedge fund. Because financial regulations define hedge fund participants as being made up of these types of investors who are supposedly less vulnerable to risk, these funds are allowed to take greater risks in the market targeting higher returns.

The more aggressive trading strategies enabled by this hedge fund definition enabled these funds to rise quickly to prominence in the financial markets. In 1966, Fortune Magazine listed a little-known hedge fund as yielding significantly greater profit than all mutual funds of the time, over a period of more than five years. This news launched the hedge fund as a popular investment vehicle, and within two years there were 140 operating hedge funds. From that time until the present, hedge funds have become far more numerous, as well as more complex.

The specific number of currently operating hedge funds is difficult to calculate, given the lack of federal oversight and the hedge fund definition employed by the SEC, but the peak value of the hedge fund industry was estimated at over two trillion dollars. Periodic peaks of high performance among hedge funds tend to attract the most creative and ambitious investors and financial professionals to hedge fund jobs. Hedge funds have long since moved beyond the simple strategy of balancing long-term stock holdings with portfolios of short positions to balance potential losses. Today’s definition of a hedge fund is quite different from the 1960’s. Despite periodic performance downturns, which have sometimes been subject to enormous losses, today hedge funds have less to do with protecting investments against uncertainty and more to do with the aggressive and high-risk investment strategies allowed by the regulatory freedom.

What Makes a Hedge Fund Different?

2009-07-29T08:26:00.000-07:00

Another of the differences that define hedge fund investments is how they are managed. In order to maintain the balance of investments necessary to ensure absolute returns, hedge funds are generally managed more closely than other types of investment funds. A hedge fund manager, who is frequently also an investor, is responsible for defining a hedge fund strategy that will meet the investment return goals of the group members. Considerable expertise is required for the management of a hedge fund, so the hedge fund portfolio manager is generally paid a management fee based on the total holdings of the fund, as well as a performance fee based on the overall returns realized by the investors.

Hedge funds also differ from other types of investments in how they are regulated by the government. Hedge funds based in the US are not required to be registered with the SEC, as are other types of public investment companies. The hedge fund industry is much more loosely regulated than other financial industries. This is due to the fact that the government regulatory agencies define hedge fund participants as sophisticated investors by a strict set of criteria, indicating that less regulation is warranted because of a higher level of proven individual accountability on the part of the investors, who are required by law to be more sophisticated than the average investor. Hedge funds are also granted greater leeway in investment strategies due to a limit in the total number of investors, which is designed to reduce the total damage that can be done in the event that a hedge fund runs into financial difficulty.

It is important to note that hedge fund strategies vary greatly depending on the goals of the fund and the management techniques employed. Not all hedge funds are hedged in the usual sense of the term, and the level of risk varies from low to extremely high. Investors should research available hedge funds, including performance history, carefully in order to determine what is a hedge fund investment that falls within their desired level of investment risk.

Hedge Fund Legislation

2009-07-28T17:38:00.000-07:00

Section 3(c) 7 of the Investment Company Act of 1996 introduced additional categories of qualified clients, allowing a greater range of investors to participate in hedge funds while maintaining standards of net worth or income to ensure risk tolerance among the participants. Specific regulations used to determine what is a hedge fund participant's minimum allowable net worth or investment sophistication allows the SEC to grant to hedge fund managers greater freedom in investment strategies, and exemption from monitoring and reporting regulations applied to most other classes of investment funds.

However, historical events in the financial markets have prompted calls for greater regulations and transparency, which alter or reduce some of the benefits of hedge funds over other investment vehicles. Proposed hedge fund legislation requires hedge funds to be periodically evaluated to determine if their net worth poses a threat to the economy in the event of catastrophic losses, which might result in greater regulatory involvement in hedge fund strategies.

Key Elements of Hedge Funds

2009-07-28T17:22:00.000-07:00

Several key elements distinguish this type of fund from other shared investment concerns, such as mutual funds. Like other investment funds, a hedge fund definition may include stocks, bonds, currencies, commodities, derivatives, and other financial instruments. One difference lies in the "hedging", or careful choice of investments to compensate for potential market fluctuations. In order to mitigate different types of risk, hedge funds generally include investments in a variety of financial areas that respond differently to market events.

For example, a hedge fund that includes a commodity whose value follows the market, such as oil, might also include a smaller amount of a commodity whose value goes up when the market is down, such as gold. In this way, if the price of oil increases, the value of the fund increases, and if the price of oil decreases, the investment in gold protects the value of the fund from dropping too sharply. Investors in hedge funds also use a wide variety of financial tools to ensure the security of the fund, and may define hedge fund tactics to include short selling, leverage (borrowing money to invest), arbitrage (taking advantage of regional differences in commodity prices), and other techniques. A hedge fund might use short selling of certain stocks to offset any change in the value of other stock holdings, thus smoothing out changes in value created by market shifts.

What is a Hedge Fund?

2009-07-28T17:16:00.000-07:00

Throughout the history of the stock market, wise investors have looked for ways to minimize risk while maximizing profits. The problem of protecting an investment portfolio from uncertainty in the market is often solved with special investments that soften or mitigate losses in value, helping investors to preserve their capital. Investments of this kind are called hedge funds.

To arrive at a concise hedge fund definition, it is important to look at the priorities of the individuals and organizations that invest in the hedge fund industry and the government regulations that define hedge fund scope, and to examine hedge fund strategies.

A common hedge fund definition is an investment portfolio shared by a group of investors looking for an absolute return on their investment. The phrase "absolute return" refers to the fact that hedge fund strategies are designed so that the fund should always make money, even if there is a decrease in value of some of the investments in the fund, or a drop in the value of the market as a whole.

Therefore, the best answer to the question "What is a hedge fund?" is that hedge funds are designed to shield investments from market uncertainty, in order to ensure positive returns.

About Us

2009-02-11T19:04:00.000-08:00

In and around hedge funds for years, this is a site that is meant to educate. We write to inform and, maybe someday, make a little money from the site as well.

We hope you find the site helpful and educational. We know there are plenty of industry details that could be covered, but you are on the wrong site for that. We aim to keep it pretty high-level and leave the technical stuff to the many sites already in that game.

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Michael