Private Equity
Andrea Alms Video: Money In Motion 165 - Hedge Fund Market Part 1
July 2025 - Private Equity
Andrea Alms Video: Money in Motion 165 - Hedge Fund Market Part 1
TRANSCRIPT Hello, my name is Andrea Alms. I'm a technology investor and financial manager and this is your money motion. Hedge fund - a hedge fund is a private investment fund that pulls money from high net worth individuals and institutional investors. They employ a variety of investment strategies to achieve high returns, often using leverage, selling short and other complex techniques.
Hedge funds are less regulated than traditional investment vehicles like mutual funds, and are typically only open to accredited investors. This is a structure of a typical hedge fund. We'll plan to deep dive on this topic on a next episode. Key characteristics private pools of capital hedge funds are not publicly traded and are restricted to a select group of investors.
Less regulation they operate with fewer regulatory constraints compared to mutual funds, allowing for greater flexibility and investment strategies. Diverse strategies. Hedge funds employ a wide array of strategies, including long short equity, global macro merger arbitrage, and others riskier than traditional investments. The use of leverage and other sophisticated techniques can lead to higher potential returns, but also greater risk of loss.
High net worth investors hedge funds primarily target individuals and institutions with substantial wealth and investment expertise. How do they work? Fund managers oversee the investment process, making decisions on which assets to buy and sell. Based on a fund strategy. Strategies. Hedge funds may utilize strategies like selling short that's betting on the decline of an asset or leveraging borrowing to amplify returns or derivatives trading.
Fee structure. Hedge funds typically charge a management fee. 2% of assets under management and a performance fee of 20% of profits above a certain benchmark. Thank you. This is your money. Your money. in motion.