In this video, we talk about the top 10 biggest Hedge Funds in the world. To describe a hedge fund in simple terms, it is a pooled investment structure that is set up by a money manager or registered investment advisor.
It isn’t a specific type of investment but rather an entire vehicle of investment. You get to invest in a pool of funds and the idea is to generate high rewards. It is going to be this way since there’s a high risk involved in the process at the same point in time. While they are not regulated often, it leads to higher levels of risk with these funds. When you’re investing in a hedge fund, you have to pay higher fees to their managers at the same point in time. This means that they are limited only to wealthy investors in the marketplace.
When they were originally formed, the idea was to reduce risk to a minimum level so they had both long and short stock positions. Since investors were able to make money irrespective of whether the market saw a high or a low, all types of pooled capital arrangements were included in it. So the task of the hedge fund manager is to include funds from the outside and invest them as per his promise.