decisions on aspects having substantial certainties . . .
Hedge Fund Basics
Hedge Fund Defined
A hedge fund
is a private investment vehicle organized for the purpose of pooling
investors' assets. The sponsor of the hedge fund, commonly referred
to as the hedge fund manager, invests the hedge fund's assets
pursuant to a predetermined investment strategy. In the absence of
such a pooling vehicle, an investor, on his own, would not be able
to diversify his assets or have the resources to monitor, evaluate
and implement the investing and trading strategies to be engaged in
by the manager. Although historically the defining characteristic of
a hedge fund was to "hedge" against market risk and volatility,
hedge funds today apply a variety of investment techniques, and are
typically allowed to engage in leverage and other sophisticated
investment techniques to a much greater extent than mutual funds.
Hedge funds do not publicly offer their securities, generally only
accept investment from financially sophisticated investors, and are
typically limited to no more than 100 investors.
