17 Facts About Hedge fund

Hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as short selling, leverage, and derivatives.

Hedge fund usually pays its investment manager a management fee and a performance fee.

Jones referred to his fund as being "hedged", a term then commonly used on Wall Street to describe the management of investment risk due to changes in the financial markets.

Hedge fund strategies are generally classified among four major categories: global macro, directional, event-driven, and relative value.

Hedge fund managers pursuing the distressed debt investment strategy aim to capitalize on depressed bond prices.

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Hedge fund is an investment vehicle that is most often structured as an offshore corporation, limited partnership, or limited liability company.

The fund is managed by an investment manager in the form of an organization or company that is legally and financially distinct from the hedge fund and its portfolio of assets.

Hedge fund administrators are typically responsible for valuation services, and often operations, and accounting.

Calculation of the net asset value by the administrator, including the pricing of securities at current market value and calculation of the Hedge fund's income and expense accruals, is a core administrator task, because it is the price at which investors buy and sell shares in the Hedge fund.

The year-end audit is performed in accordance with the standard accounting practices enforced within the country in which the Hedge fund it established, typically US GAAP or the International Financial Reporting Standards.

However, the Hedge fund's investors are subject to tax in their own jurisdictions on any increase in the value of their investments.

Each country has its own specific restrictions on hedge fund activities, including controls on use of derivatives in Portugal, and limits on leverage in France.

However, summaries of individual hedge fund performance are occasionally available in industry journals and databases.

However, more recent data show that hedge fund performance declined and underperformed the market from about 2009 to 2016.

Equity and debt index Hedge fund products provide investable access to most developed markets in these asset classes.

The typical hedge fund is not traded on exchange, will accept investments only at the discretion of the manager, and does not have an obligation to publish returns.

Hedge fund leverage decreased prior to the financial crisis, even while the leverage of other financial intermediaries continued to increase.