Hedge funds leaving

Hi TRSD,

Thanks for the great link. Hedge funds are a great way to find deals. I know people think it would be tough to contact them, but it is not. They are selling off their inventory and we need to take advantage of this. I will be writing a lot more about this in my next post, be sure to take a read at that. The trend in our investing is changing and we need to focus on hedge funds for supply of deals. This article was a great start to that.

Thanks,
Shah

Thanks for the post, found it very interesting.

good story to keep us current of the market trend.

Interesting Thanks for Sharing Tom!

A hedge fund is a pooled investment vehicle administered by a professional management firm, and often structured as a limited partnership, limited liability company, or similar vehicle.[1][2] They are usually distinguished from private equity funds, which use the more illiquid investment strategies associated with private equity. Hedge funds invest in a diverse range of markets and use a wide variety of investment styles and financial instruments.[2] The name "hedge fund" refers to the hedging techniques traditionally used by hedge funds, but hedge funds today do not necessarily hedge.[3] Hedge funds usually are structured to minimize regulatory oversight; they are made available only to certain sophisticated or accredited investors and cannot be offered or sold to the general public.[3]

Hedge funds are most often open-ended and allow additions or withdrawals by their investors. A hedge fund's value is calculated as a share of the fund's net asset value, meaning that increases and decreases in the value of the fund's investment assets (and fund expenses) are directly reflected in the amount an investor can later withdraw.

Many hedge fund investment strategies aim to achieve a positive return on investment regardless of whether markets are rising or falling ("absolute return"). Hedge fund managers often invest money of their own in the fund they manage, which serves to align their own interests with those of the investors in the fund.[4][5] A hedge fund typically pays its investment manager an annual management fee, which is a percentage of the assets of the fund, and a performance fee if the fund's net asset value increases during the year. Some hedge funds have several billion dollars of assets under management (AUM). As of 2009, hedge funds represented 1.1% of the total funds and assets held by financial institutions.[6] As of June 2013, the estimated size of the global hedge fund industry was US$2.4 trillion.

Because hedge funds are not sold to the general public or retail investors, the funds and their managers have historically been exempt from some of the regulation that governs other funds and investment managers with regard to how the fund may be structured and how strategies and techniques are employed. Regulations passed in the United States and Europe after the 2008 credit crisis were intended to increase government oversight of hedge funds and eliminate certain regulatory gaps.[7]Wiks

Hedge funds employ a wide range of trading strategies but classifying them is difficult due to the rapidity with which they change and evolve.[25] However, hedge fund strategies are generally said to fall into four main categories: global macro, directional, event-driven, and relative value (arbitrage).[26] These four categories are distinguished by investment style and each have their own risk and return characteristics. Managed futures or multi-strategy funds may not fit into these categories, but they are, nonetheless, popular strategies with investors.[27] It is possible for hedge funds to commit to a certain strategy[28] or employ multiple strategies to allow flexibility, for risk management purposes, or to achieve diversified returns.[25] The hedge fund's prospectus, also known as an offering memorandum, offers potential investors information about key aspects of the fund, including the fund's investment strategy, investment type, and leverage limit.[28]

The elements contributing to a hedge fund strategy include: the hedge fund's approach to the market; the particular instrument used; the market sector the fund specializes in (e.g. healthcare); the method used to select investments; and the amount of diversification within the fund. There are a variety of market approaches to different asset classes, including equity, fixed income, commodity, and currency. Instruments used include: equities, fixed income, futures, options and swaps. Strategies can be divided into those in which investments can be selected by managers, known as "discretionary/qualitative", or those in which investments are selected using a computerized system, known as "systematic/quantitative".[29] The amount of diversification within the fund can vary; funds may be multi-strategy, multi-fund, multi-market, multi-manager or a combination.

Sometimes hedge fund strategies are described as absolute return and are classified as either market neutral or directional. Market neutral funds have less correlation to overall market performance by "neutralizing" the effect of market swings, whereas directional funds utilize trends and inconsistencies in the market and have greater exposure to the market's fluctuations.[25][30]Wiki