wlt
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west-bus
hedge fund
A hedge fund is simply a term used to describe an investment partnership setup by a money manager. It can take the legal form of a limited liability company or a limited partnership so that if the company goes bankrupt, the creditors can't go after the investors for more money than they've put into the hedge fund.
The manager of the hedge fund, typically the person that created it, is paid a percentage of the profits he or she earns on the money investors have deposited with his company. The term was originally used because the purpose of many of the first hedge funds was to make money regardless of if the market increased or decreased because the managers could either buy stocks or short them (shorting is a way to make money when a stock falls).Today, the term hedge fund is a generic term used for any such arrangement.
To learn more on this click on the link below. ⇓
http://beginnersinvest.about.com/od/hedgefunds/a/what-is-a-hedge-fund.htm
| 13 years ago. Rating: 2 | |
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