Hedge Rose : At its most basic, a hedge fund is an investment vehicle that pools capital from a number of investors and invests in securities and other instruments.[1] It is administered by a professional management firm, and often structured as a limited partnership, limited liability company, or similar vehicle.[2][3] Hedge funds are generally distinct from mutual funds as their use of leverage is not capped by regulators[4] and from private equity funds as the majority of hedge funds invest in relatively liquid assets.[5] Hedge funds invest in a diverse range of markets and use a wide variety of investment styles and financial instruments.[3] The name hedge fund refers to the hedging techniques traditionally used by hedge funds, but hedge funds today do not necessarily hedge.[1] Hedge funds are made available only to certain sophisticated or accredited investors and cannot be offered or sold to the general public.[1] As such, they generally avoid direct regulatory oversight, bypass licensing requirements applicable to investment companies, and operate with greater flexibility than mutual funds and other investment funds.[6] Hedge funds have existed for many decades, but have become increasingly popular in recent years, growing to be one of the worlds major investment vehicles and sources of capital.[7] Hedge funds are most often open-ended and allow additions or withdrawals by their investors (generally on a monthly or quarterly basis).[1] A hedge funds value is calculated as a share of the funds net asset value, meaning that increases and decreases in the value of the funds investment assets (and fund expenses) are directly reflected in the amount an investor can later withdraw.
Posted on: Sat, 30 Aug 2014 14:22:00 +0000
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