Participants in hedge funds, Financial Management

Participants in Hedge Funds:

The Sponsor and the Investors

Sponsors are promoters and generally, they hold a profit share on percentage for the capital invested in the Fund. In limited partnerships, they are the general partners and usually receive an allocation of income on the Fund based on performance. General partners also act as intermediaries for investors in Hedge Fund industry. They invest the Fund collected from investors based upon investment strategies to maximize returns.

Generally, investors in Hedge Fund industry are persons or institutions willing to take high risk for high returns. The largest category of investors in Hedge Funds comprises retail and high networth individuals. According to estimates, they contribute about 75 percent of the total assets managed in the Hedge Fund universe. Others who are increasing their investment activities in Hedge Funds are pension funds, endowment funds, fund of Hedge Funds, etc. According to the Securities Exchange Commission (SEC), US guidelines, the minimum level of networth for investment in the Hedge Funds for investors is $1 million. This limit is necessary to qualify them as ‘accredited investor', to participate in Hedge Funds. The limit for investment in Hedge funds for corporations, trusts, and other institutions is $5 million in networth and total assets of $25 million. Percentage of institutional and investors allocating capital to hedge funds for the years 2003 and 2005

 

Posted Date: 9/11/2012 2:09:27 AM | Location : United States







Related Discussions:- Participants in hedge funds, Assignment Help, Ask Question on Participants in hedge funds, Get Answer, Expert's Help, Participants in hedge funds Discussions

Write discussion on Participants in hedge funds
Your posts are moderated
Related Questions
Event-Driven Strategies : These strategies are solely focus on events of corporate life cycle for investing. They involve significant opportunities created by corporate events such

State the expectations theory of the term structure of interest rates. Expectations theory: The expectations theory of the term structure of interest rates specifies that

Q. What is Evaluation of Credit Policy? Evaluation of Credit Policy: - A credit policy is prepared to maintain the investment in receivables at optimum level. Receivable Turnov

Examples of ICQ's and ICEQ's ICQ: "Does an authorised senior person review purchase invoices before payment is made?" ICEQ: "Can payments be made on purchase invoices th

Social Assistance Program for the Elderly For the elderly destitutes, the Central and many State Governments have designed several social assistance programs. Under the nationa

A firm's operating and financing decisions   Risk also results from decisions made within the company.  This risk is usually divided into two classes:  - Business risk is th

Weak form level of efficiency This level states that share prices fully reflect information in historic share price movement and patterns (past information/historic information

Clearing and Settlement The Treasury Bills are available in physical form if an investor desires so. The market is mostly dominated by institutional players who have a facility

What are the differences between life insurance and property and causality insurance? Life insurance prevents against death, retirement and illness. Companies obtain premiums b

Question: Part A  The financial system is complex in structure and function throughout the world. There are many different types of institutions: banks, insurance compani