Definition of hedge fund
: an investing group usually in the form of a limited partnership that employs speculative techniques in the hope of obtaining large capital gains
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Recent Examples of hedge fund from the Web
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The Republican gubernatorial field features two wealthy outsiders with no experience in politics: former hedge fund manager David Stemerman and former UBS Investment Bank chief financial officer Bob Stefanowski.
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One prominent bundler, Paul E. Singer, the Republican hedge fund manager, can raise six-figure sums for House candidates, and donates millions of dollars to national G.O.P. causes and candidates.
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Disgraced ex-pharmaceutical executive and hedge fund manager Martin Shkreli is now behind bars, facing a seven-year prison sentence for securities fraud.
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In addition to Kestenbaum, the Observer has identified three other bidders: hedge fund manager David Tepper, e-commerce entrepreneur Michael Rubin and financial services CEO Ben Navarro.
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One hedge fund manager moving his office to a southern state reports that his new home on a golf course will be more than double the size of his house in Chatham, N.J. while generating just one third of the current property tax bill.
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The former hedge fund manager from California ranks 383rd on the Forbes magazine list of the richest Americans.
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The 34-year-old English socialite has been married to the 42-year-old hedge fund manager for less than a year, but have been together since 2015.
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The 34-year-old English socialite and 42-year-old hedge fund manager celebrated their nuptials in a beautiful ceremony at Saint Mark's Church near the Middleton family home.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'hedge fund.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
First Known Use of hedge fund
1966
Financial Definition of HEDGE FUND
hedge fund
What It Is
A hedge fund is an investment structure designed to allow management of a private, unregistered portfolio of assets.
How It Works
The original concept of a hedge fund was to offer plays against the market using short selling, futures, and derivatives. Today, hedge funds follow any number of strategies and cannot be considered a homogenous asset class.
Hedge funds (as an asset class) use various strategies, including leverage, hedging, and macroeconomic bets on commodities, currencies, and interest rates. The common denominator of hedge funds is not their investment strategy but their search for absolute returns (as opposed to relative returns). Absolute return strategies focus on generating a positive return on investment (ROI) regardless of the direction of the financial markets.
Hedge fund managers seek freedom to achieve high absolute returns and wish to be rewarded for their performance. The compensation arrangement for the manager typically specifies considerable profit participation. The specific legal organization of hedge funds and the considerable fee structure expected by fund managers are probably the only uniform characteristics of hedge funds.
Only accredited investors are eligible to invest in hedge funds. The term accredited investor includes wealthy individuals and organizations like corporations, endowments, or pension funds. Accredited investors invest in hedge funds because they are looking for investments with negative correlation to the broad market.
Why It Matters
Because they operate outside the realm of the public markets and are lightly regulated, hedge funds have been declared "off limits" to most individual investors. Some say the lack of oversight paired with the high-risk, high-return strategies employed by most hedge funds have resulted in some of the world's most catastrophic financial events, including the failure of Long-Term Capital Management in 1998 and the collapse of two Bear Stearns hedge funds in 2007.
That being said, all investors, regardless of experience and sophistication, need to perform extensive due diligence before investing in any hedge fund. Before investing in a hedge fund, an investor needs to consider the correlation of the fund strategy to the rest of the investor’s portfolio, the reputation and success rate of the fund manager, the use of leverage, as well as the fee schedule.
Source: Investing Answers
HEDGE FUND Defined for English Language Learners
hedge fund
Definition of hedge fund for English Language Learners
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finance : a group of investors who take financial risks together in order to try to earn a lot of money
Law Dictionary
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See words that rhyme with hedge fund Britannica.com: Encyclopedia article about hedge fund
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