Hedge Fund Policy Essay -- Economics Wealth Papers

sidestep Fund Policy What makes a wangle fund such a unique investment? And why is it so controversial? Many musical note the risks of a postpone fund strongly outweigh its benefits. And with some bullion, it does. merely when a put off fund strives, it has impeccable potential. It is arguable that the regulation on hedge funds, or lack there of, is what allows for so many another(prenominal) to falter. However, condescension various suggestions for polity changes, a few lemons still remain. Would changes in policy and regulation of a Hedge Fund allow it to be a to a greater extent attractive investment opportunity? Although some alterations could make the hedge fund a safer investment, some risks are completely unavoidable. Ultimately, these changes may not only create more problems, but also take international from the uniqueness of this remarkable form of investment. A hedge fund is typically a private partnership invested primarily in publicly traded securities or futu res. They are limited to 99 investors and require large minimum investments, which fag range from $25,000 to several million dollars. Sixty five percent of the investors mustiness rescue a net worth of at least $1 million. A general partner, who uses sophisticated strategies to make bets on the fund?s direction, and generally receives 20% of the profits, leads the fund. Hedge fund strategies fall into four percipient categories absolute return, long/short equity, event driven, and global asset allocation. sacrosanct driven strategies are known as market-neutral funds, which seek to moderate the do of overall market forces. Long/Short hedge funds, which represent close half of the assets in the hedge fund industry, seek to profit from underpricings by buying long, and overpricing through short selling. Event driven hedge funds ... ... able to grow and have the leverage it had, if it had not been lent the money, verbalize Bert Ely. Though many may argue that hedge funds do mo re harm than good, they are still extremely popular investments and have proven to be very successful. Many have benefited with the current hedge fund policy and see no need for regulatory changes. discordant proposed changes may not, in fact, be entirely beneficial. Once implemented, the suggested solutions could create more problems for the hedge fund world. And such changes would alter the characteristics that attract so many to such incredible investment opportunities. In the end, a better hedge fund policy is neither plausible nor desirable. Sourceshttp//library.hbs.edu/hedgefunds.htmhttp//www-personal.umd.umich.edu/mtwomey/newspapers/100198he.htmlhttp//www.bernstein.com/perfstrat/products/ts_020401.htm