Hedge Fund Investments  =  Mutual  Fund Investments for the - SUPER RICH !

The main purpose of a Hedge Fund is to often make High Risk Investments for Eceptionally High Returns.  >>  is the largest Hedge Fund in South Africa.

DEFINITION  of  ' Hedge Fund '

Hedge Funds are alternative investments using pooled funds that may use a number of different strategies in order to earn active return, or alpha, for their investors. Hedge Funds may be aggres-sively managed or make use of Derivatives and leverage in both domestic and international markets with the goal of generating High Returns ( either in an absolute sense or over a specified market benchmark ). Because Hedge Funds may have low correlations with a traditional portfolio of stocks and bonds, allocating an exposure to Hedge Funds can be a good diversifier.


Investing in Hedge Funds

For the most part, Hedge Funds ( unlike Mutual Funds ) are largely unregulated because they cater to Sophisticated Investors. In the U.S., laws require that the majority of investors in the fund be accredited. That is, they must earn a minimum amount of money annually and have a net worth of more than $1 million, along with a significant amount of investment knowledge. You can think of Hedge Funds as Mutual Funds for the Super Rich. They are similar to Mutual Funds in that investments are pooled and professionally managed, but differ in that the fund has far more flexibility in its investment strategies.

Hedge Fund Managers are compensated in two ways :  a fee for Assets Under Management ( AUM ) and an Incentive Fee, which is a percentage of any profits.  A typical fee structure may be 2 and 20, where the AUM fee is 2% and the incentive fee is 20% of profits. Often times, fee limitations such as high-water marks are employed to prevent portfolio managers from getting paid on the same returns twice.  Fee caps may also be in place to prevent managers from taking on excess risk. 
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Hedge Funds are different from Private Equity Firms

Private equity firms characteristically make longer-hold investments in target industry sectors or specific investment areas where they have expertise. Private equity firms and investment funds should not be confused with hedge fund firms which typically make shorter-term investments in securities and other more liquid assets within an industry sector but with less direct influence or control over the operations of a specific company. Where private equity firms take on operatio-nal roles to manage risks and achieve growth through long term investments, hedge funds more frequently act as short term traders of securities betting on both the up and down sides of a business or industry sector's financial health.  CLICK above LINK in Red for more details.

EXAMPLE - Download a file : ANCHOR CAPITAL - Hedgefund Factsheet


Hedge Fund Manager Banks 100 Million on ABIL

A local Hedge Fund Manager ( Jean Pierre Verster ) of 36One - the largest Hedge Fund in South Africa made 100 Million in profits for their clients on the demise of African Bank Investments ( Abil ). 
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The Award goes to : Peregrine High Growth Fund.
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Fund Managers' Personal Lives Can Hurt Investment Returns

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