News and Reviews - A lot has been talked abut Hedge Funds in last 24 months. Both Fund and Fund Managers create awe and envy to many, as they are vehicle for rich and wealthy across the world to reap huge investment incomes. Mostly a guarantee that select club of rich will continue to grow wealthier for all times to come. Not any more, if some of the recent reports are any indication. The whooping 3.00 trillion dollar (bigger than Chinese or Indian economy) Hedge Fund’s hegemony is being challenged now. The Wall Street meltdown is impacting this august fund too.

So what is Hedge Fund? - According to a simple definition, A hedge fund is a private investment fund open only to sophisticated investors. Depending on the type of the fund, the investor would need to fulfill the requirement of “accredited investor” or “qualified client.” In most states, hedge funds are not required to register with the Securities and Exchange Commission and are therefore often regarded as “secretive” or “unregulated.” There are an estimated 10,000+ hedge funds in the U.S. today. Hedge Fund assets are estimated to manage almost $3 trillion, but because all hedge fund data is self-reported, the exact number is unknown. A Hedge Fund can take both long and short positions (mostly short), use arbitrage, buy and sell undervalued securities, trade options or bonds, and invest in almost any opportunity in any market where it foresees impressive gains at reduced risk. Still confused? Well Louise Story of NYT has put an interesting insight about dwindling status of Hedge Funds now. Click to read on …

 

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