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Top 10 Hedge funds for International Startup - Risk Management Tool

Hedge Fund- Special thanks to Andrei Kolodovski, for this below explanation.

We need to understand first what is Hedge Fund, why is so called and its importance.

The Hedge fund is a type of an investment partnership.

A hedge fund invests private capital speculatively to maximize capital appreciation.

Hedge Fund is an investment partnership restricted to "sophisticated investors" - people who have enough experience to protect themselves.
Hedge Funds are not allowed to accept capital from a general public; in exchange, they don't have restrictions on what they can invest into.

If you want to co-invest with other people, you need an entity that can combine your capitals. Depending on what this entity invests into, and who is allowed to join it, various types of investment partnerships are possible.

The most common type of investment partnerships is Mutual Funds. They invest in publicly traded securities (stocks & bonds), and anyone is allowed to join. To protect general public investors, Mutual Funds are heavily regulated and restricted in what they can invest into.

Let's look at some of the word's top 10 Hedge funds.
  1. Bridgewater Associates
  2. JP Morgan Asset Management
  3. AQR Capital Management
  4. BlackRock
  5. Viking Global Investors
  6. Man Group
  7. Lone Pine Capital
  8. Credit Suisse Asset Management
  9. Adage Capital Management
  10. York Capital Management

Since Hedge Funds don't have any restrictions on the investment side, they use many strategies to make money, such as:
  • Distressed Securities: investing in companies in difficult situations;
  • Emerging Markets: investing in developing countries like India, China;
  • Market Neutral: making portfolios insensitive to market fluctuations;
  • Equity Long/Short: buying good/cheap and shorting bad/expensive stocks;
  • Event Driven: exploiting inefficiency around mergers and other events;
  • Global Macro: investing in global economic trends;

A hedge fund is an aggressively managed portfolio of investments that uses advanced investment strategies such as leveraged, long, short and derivative positions in both domestic and international markets with the goal of generating high returns.