What is a Hedge Fund?

A Hedge Fund is a private investment fund that is generally unregulated or permitted by regulators to undertake a wider range of activities. Generally, Hedge Funds are open to a limited number of professional, institutional or wealthy investors. Hedge Funds have a manager that uses alternative investment techniques, such as short selling, margin investing, debt, commodities and derivatives. A Hedge Fund typically pays a performance-based fee to its investment manager. Top fund managers typically beat the general market performance and a manager with talent can furnish large capital returns not only for his or her investors but also for the managers themselves.

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