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A hedge fund is an investment fund open to a limited range of investors that undertakes a wider range of investment and trading activities than traditional long-only investment funds, and that, in general, pays a performance fee to its investment manager. Every hedge fund has its own investment strategy that determines the type of investments and the methods of investment it undertakes. Hedge funds, as a class, invest in a broad range of investments including shares, debt and commodities. Some people consider the fund created in 1949 by Alfred Winslow Jones to be the first hedge fund. [1]
As the name implies, hedge funds often seek to hedge some of the risks inherent in their investments using a variety of methods, most notably short selling and derivatives. However, the term "hedge fund" has also come to be applied to certain funds that, as well as (or instead of) hedging certain risks, use short selling and other "hedging" methods as a trading strategy to generate a return on their capital.
In most jurisdictions hedge funds are open only to a limited range of professional or wealthy investors who meet certain criteria set by regulators, and are accordingly exempted from many regulations that govern ordinary investment funds. The exempted regulations typically cover short selling, the use of derivatives and leverage, fee structures, and the rules by which investors can remove their capital from the fund. Light regulation and the presence of performance fees are the distinguishing characteristics of hedge funds.
The net asset value of a hedge fund can run into many billions of dollars, and the gross assets of the fund will usually be higher still due to leverage. Hedge funds dominate certain specialty markets such as trading within derivatives with high-yield ratings and distressed debt. [2]
Awake 1989 August 8:
WHEN it comes to curing what ails Wall Street, there is no shortage of ideas. But there is a shortage of agreement. Some experts argue that debt and LBOs must be limited, while others insist that both are good for the economy. The two sides are heavily armed with statistics to “prove” their points.
Helmut Schmidt feels that the world’s major economic powers (United States, Germany, Japan) must cooperate to solve the world’s economic woes. He says: “The mediocrity of all three governments can be no excuse for spending more time complaining about one another than recognizing their own deficiencies. Even mediocre people can shoulder responsibility.”
But ask yourself: How much can we reasonably expect from inherently mediocre human governments? Schmidt readily admits, for instance, that the problem of Third World debt is “unsolved and virtually insoluble.” Can the mediocre solve the insoluble?
These words of a wise man of some 25 centuries ago are right on the mark: “It does not belong to man who is walking even to direct his step.” (Jeremiah 10:23) How true those words have proved to be today! The world’s economy is too complicated for even the experts to understand, let alone repair.
What can you do in the face of the world’s economic instability? The Bible again has some pointed advice: Invest wisely! Note Jesus’ words at Matthew 6:19, 20: “Stop storing up for yourselves treasures upon the earth, where moth and rust consume, and where thieves break in and steal. Rather, store up for yourselves treasures in heaven, where neither moth nor rust consumes, and where thieves do not break in and steal.”
But how do you do that—store up treasure in heaven? You begin by realizing that you, like all of us, have spiritual needs to fill. (Matthew 5:3) You can address those needs by investing something even more precious than money—your time—in studying the Bible. You will be amazed at the simplicity and reasonableness of the answers it gives to your most troubling questions.
The ex-yuppie mentioned in the previous article did just that. He returned to the study of the Bible that he had abandoned during his busy years on Wall Street, and he found that doing so changed his life for the better. He was fascinated to learn that the Bible foretells the final collapse of all the greed-driven economic systems of this world. When God brings this world system to its cataclysmic end, no stock portfolio, no bankroll, will buy protection or escape. Money will be so useless that people will throw it into the very streets. (Ezekiel 7:19; 1 John 2:15-17)
Especially comforting is the Bible’s promise that after that time of destruction, greed will no longer rule the world. Justice, not profit, will then reign forever. (Isaiah 9:6, 7) Indeed, some day people will say, ‘Wall Street—what’s that?’
WHEN it comes to curing what ails Wall Street, there is no shortage of ideas. But there is a shortage of agreement. Some experts argue that debt and LBOs must be limited, while others insist that both are good for the economy. The two sides are heavily armed with statistics to “prove” their points.
Helmut Schmidt feels that the world’s major economic powers (United States, Germany, Japan) must cooperate to solve the world’s economic woes. He says: “The mediocrity of all three governments can be no excuse for spending more time complaining about one another than recognizing their own deficiencies. Even mediocre people can shoulder responsibility.”
But ask yourself: How much can we reasonably expect from inherently mediocre human governments? Schmidt readily admits, for instance, that the problem of Third World debt is “unsolved and virtually insoluble.” Can the mediocre solve the insoluble?
These words of a wise man of some 25 centuries ago are right on the mark: “It does not belong to man who is walking even to direct his step.” (Jeremiah 10:23) How true those words have proved to be today! The world’s economy is too complicated for even the experts to understand, let alone repair.
What can you do in the face of the world’s economic instability? The Bible again has some pointed advice: Invest wisely! Note Jesus’ words at Matthew 6:19, 20: “Stop storing up for yourselves treasures upon the earth, where moth and rust consume, and where thieves break in and steal. Rather, store up for yourselves treasures in heaven, where neither moth nor rust consumes, and where thieves do not break in and steal.”
But how do you do that—store up treasure in heaven? You begin by realizing that you, like all of us, have spiritual needs to fill. (Matthew 5:3) You can address those needs by investing something even more precious than money—your time—in studying the Bible. You will be amazed at the simplicity and reasonableness of the answers it gives to your most troubling questions.
The ex-yuppie mentioned in the previous article did just that. He returned to the study of the Bible that he had abandoned during his busy years on Wall Street, and he found that doing so changed his life for the better. He was fascinated to learn that the Bible foretells the final collapse of all the greed-driven economic systems of this world. When God brings this world system to its cataclysmic end, no stock portfolio, no bankroll, will buy protection or escape. Money will be so useless that people will throw it into the very streets. (Ezekiel 7:19; 1 John 2:15-17)
Especially comforting is the Bible’s promise that after that time of destruction, greed will no longer rule the world. Justice, not profit, will then reign forever. (Isaiah 9:6, 7) Indeed, some day people will say, ‘Wall Street—what’s that?’
WHEN it comes to curing what ails Wall Street, there is no shortage of ideas. But there is a shortage of agreement. Some experts argue that debt and LBOs must be limited, while others insist that both are good for the economy. The two sides are heavily armed with statistics to “prove” their points.
Helmut Schmidt feels that the world’s major economic powers (United States, Germany, Japan) must cooperate to solve the world’s economic woes. He says: “The mediocrity of all three governments can be no excuse for spending more time complaining about one another than recognizing their own deficiencies. Even mediocre people can shoulder responsibility.”
But ask yourself: How much can we reasonably expect from inherently mediocre human governments? Schmidt readily admits, for instance, that the problem of Third World debt is “unsolved and virtually insoluble.” Can the mediocre solve the insoluble?
These words of a wise man of some 25 centuries ago are right on the mark: “It does not belong to man who is walking even to direct his step.” (Jeremiah 10:23) How true those words have proved to be today! The world’s economy is too complicated for even the experts to understand, let alone repair.
What can you do in the face of the world’s economic instability? The Bible again has some pointed advice: Invest wisely! Note Jesus’ words at Matthew 6:19, 20: “Stop storing up for yourselves treasures upon the earth, where moth and rust consume, and where thieves break in and steal. Rather, store up for yourselves treasures in heaven, where neither moth nor rust consumes, and where thieves do not break in and steal.”
But how do you do that—store up treasure in heaven? You begin by realizing that you, like all of us, have spiritual needs to fill. (Matthew 5:3) You can address those needs by investing something even more precious than money—your time—in studying the Bible. You will be amazed at the simplicity and reasonableness of the answers it gives to your most troubling questions.
The ex-yuppie mentioned in the previous article did just that. He returned to the study of the Bible that he had abandoned during his busy years on Wall Street, and he found that doing so changed his life for the better. He was fascinated to learn that the Bible foretells the final collapse of all the greed-driven economic systems of this world. When God brings this world system to its cataclysmic end, no stock portfolio, no bankroll, will buy protection or escape. Money will be so useless that people will throw it into the very streets. (Ezekiel 7:19; 1 John 2:15-17)
Especially comforting is the Bible’s promise that after that time of destruction, greed will no longer rule the world. Justice, not profit, will then reign forever. (Isaiah 9:6, 7) Indeed, some day people will say, ‘Wall Street—what’s that?’
