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Hedge Fund Investing

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EAGLE_ON_A_ROCK_PF6M4376Hedge Fund Investing may be appropriate for you but it isn't for everyone. It may be a suitable asset allocation for accredited individual and institutional investors including endowments, pensions, trusts and family offices.

Hedge funds have been around for about 70 years and what was strictly a U.S. investment industry has now gone global with both investors and hedge funds participating from throughout the world.

For an overview of the hedge fund industry covering the history, growth and current status contact Jack Killion at This email address is being protected from spambots. You need JavaScript enabled to view it. for a complimentary copy of the PowerPoint presentation: Investing in Hedge Funds.

I invested personally in a hedge fund for the first time in 1998. In 2001 when I launched our Eagle Rock Diversified Fund as a vehicle for investors to invest in a diversified portfolio of hedge funds there were about 3000 hedge funds to choose from with most being U.S. based. Now it is estimated there are perhaps over 13,000 hedge funds throughout the world and available to investors globally.

Plan to attend a unique September event for current and potential hedge fund investors

We are working with industry leaders to organize a unique New Jersey conference in September for accredited individual and institutional investors (pensions, endowments, family offices, trusts) interested in learning in general about hedge fund investing and specifically about the 10 well established hedge funds that are being invited to present. For additional information contact: This email address is being protected from spambots. You need JavaScript enabled to view it..

What are hedge funds?

Hedge funds are structured as limited partnerships with all investment decisions being made by the General Partner. Limited partner investors' risk is limited to the capital they invest in a hedge fund.

For the new comer to hedge fund investing an easy way to develop a quick understanding of hedge funds is to compare them to typical mutual funds. For example, hedge funds:

· are generally smaller and more concentrated than mutual funds

· have high minimum investment requirements (typically $1 million or more) while mutual funds have virtually no minimum investment requirement.

· typically require all investments to remain invested for at least a year (the "lock up" period). Mutual funds lack similar "lock-up" provisions....in today and out today is possible with mutual fund investments.

· are managed by the owner with his or her own skin in the game. Mutual funds generally are managed by portfolio managers working for salaries and bonuses and they may or may not be personally invested in the mutual fund they run.

· often use more investment tools than do typical mutual funds

· are limited to having either up to 100 or up to 500 investing limited partners (hence the reason for the high minimums) while mutual funds do not have similar restrictions.

· investors need to be accredited by annual income ($200,000/year individual or $300,000 household income)) or net worth ($1 million or higher). Mutual funds can accommodate essentially any type of investor regardless of their financial strength.

· have restrictions on their marketing efforts while mutual funds can aggressively market themselves.

· restrict when investors can withdraw capital from their funds after the "lock up" period and often provide monthly or quarterly redemptions. Mutual funds provide daily liquidity.

· are much more difficult to learn about. They are not listed on the exchanges. Mutual funds are easy to identify and track.

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Friday, 21 June 2024

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