In the simplest sense, a hedge fund is a firm that invests capital for its investors. Typically, hedge fund clients are institutional investors (anyone who is charge of allocating a large pool of capital) or accredited investors (e.g. high net worth individuals).The traditional definition is that hedge funds are able to place both long and short positions – (e.g. make money in both up and down markets). The vast majority of the portfolio managers are long only – meaning they only make money when markets go up. Therefore, by definition, hedge funds are considered alternative investments and are different than a typical long only strategy.
Should you invest in one…?Read More