HEDGE FUNDS MEANING PROFESSIONAL

The term first came into use in the 1950s to describe any investment fund that used incentive fees, short-selling, and leverage.

'There is no universally accepted meaning of the expression 'hedge fund' indeed, many competing (and sometimes partially contradicting) definitions exist. JAEGER, ALL ABOUT HEDGE FUNDS, at x (2003) (Perhaps in a bit of his own hedging, Jaeger calls his definition 'provisional.'). Hedge fund managers are active managers seeking absolute return.' Hedge funds are designed for a small number of large investors, and the manager of the fund receives a percentage of the profits earned by the fund. In pursuit of their absolute return objective, hedge funds use a wide variety of investment strategies and tools. 'A hedge fund is an actively managed investment fund that seeks attractive absolute return. MANAGED FUNDS ASSOCIATION, HEDGE FUND FAQs 1 (2003). In fact, the term 'hedge fund' is used to refer to funds engaging in over 25 different types of investment strategies. However, some hedge funds engage only in 'buy and hold' strategies or other strategies that do not involve hedging in the traditional sense. The word 'hedge' refers to a hedge fund's ability to hedge the value of the assets it holds (e.g., through the use of options or the simultaneous use of long positions and short sales).

HEDGE FUNDS MEANING PROFESSIONAL

'A hedge fund can be broadly defined as a privately offered fund that is administered by a professional investment management firm (or 'hedge fund manager'). GEORGE SOROS, OPEN SOCIETY: REFORMING GLOBAL CAPITALISM 32 n.† (2000). 'Performance funds' would be a more accurate description.' Fund managers are compensated on the basis of performance rather than as a fixed percentage of assets.

They cater to sophisticated investors and are not subject to the regulations that apply to mutual funds geared toward the general public. 'Hedge funds engage in a variety of investment activities. THE SECRETARY OF THE TREASURY, THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, THE SECURITIES AND EXCHANGE COMMISSION, A REPORT TO CONGRESS IN ACCORDANCE WITH § 356(c) OF THE USA PATRIOT ACT OF 2001 (2002). 'The term 'hedge fund' refers generally to a privately offered investment vehicle that pools the contributions of its investors in order to invest in a variety of asset classes, such as securities, futures contracts, options, bonds, and currencies.' THE PRESIDENT'S WORKING GROUP ON FINANCIAL MARKETS, HEDGE FUNDS, LEVERAGE, AND THE LESSONS OF LONG-TERM CAPITAL MANAGEMENT 1 (1999). Although it is not statutorily defined, the term encompasses any pooled investment vehicle that is privately organized, administered by professional money managers, and not widely available to the public.'

'The term 'hedge fund' is commonly used to describe a variety of different types of investment vehicles that share some common characteristics. The following is a selection of definitions and descriptions of the term 'hedge fund' showing the diversity of views among commentators. Today, hedge funds are no longer defined by a particular strategy and often do not 'hedge' in the economic sense. Jones's private investment fund combined both long and short equity positions to 'hedge' the portfolio's exposure to movements in the market. 'Hedge fund' is an expression believed to have been first applied in 1949 to a fund managed by Alfred Winslow Jones. Partner, Dechert LLP Selected Definitions of 'Hedge Fund' Vaughan for the SEC Roundtable on Hedge Funds

Hedge funds meaning