What are hedge funds?

Business & Management
#1

The primary purpose of hedge funds are to give valuable returns to the investors.
Hedge funds are financial partnerships that use pooled funds and employ different strategies to earn active returns for their investors.
These funds may be managed aggressively or make use of derivatives and leverage to generate higher returns. Hedge fund strategies include long-short equity, market neutral, volatility arbitrage, and merger arbitrage.

#2

A hedge fund is basically a fancy name for an investment partnership. It’s the marriage of a fund manager, which can often be known as the general partner, and the investors in the hedge fund, sometimes known as the limited partners.

The limited partners contribute the money and the general partner manages it according to the fund’s strategy. A hedge fund’s purpose is to maximize investor returns and eliminate risk, hence the word “hedge.” If these objectives sound a lot like the objectives of mutual funds, they are, but that is basically where the similarities end.

#3

Top Hedge Funds in India?
Hedge funds are private investment partnerships and capital pools that employ a variety of proprietary methods and invest in or trade complicated goods, such as listed and unlisted derivatives. Simply put, a hedge fund is a pool of money that invests in both short and long positions, buys and sells stocks, engages in arbitrage, and trades bonds, currencies, convertible securities, commodities, and derivative products in order to earn higher returns with lower risk. As the name implies, the fund uses alternative investment methodologies to try to protect investor cash from market volatility.

How Hedge funds make money?
Hedge funds’ inner workings are as enigmatic as their exterior look. The general public has little understanding of how hedge funds make money, how they pay their staff record salaries, and how they pay rent on premium locations where their offices are located. The general public is ignorant of the numerous fees charged by funds to their investors, as well as how investors continue to make money despite the large number of fees imposed.

World’s Top 10 Hedge Fund Firms: (AUM in Hedge funds)

  1. Blackrock Advisors ($789.57 Billion as on June 30th, 2021)
  2. AQR Capital Management ($224.8 Billion as on Mar 31st, 2020)
  3. Bridgewater Associates ($154 Billion as on Mar 31st, 2021)
  4. Renaissance Technologies ($130 Billion as on June 3rd, 2021)
  5. Man Group ($123.6 Billion as on December 31st, 2020)
  6. Elliott Management ($113.5 Billion as on December 31st, 2020)
  7. Two Sigma Investments ($68.9 Billion as on March 31st, 2021)
  8. Millenium Management ($42 Billion as on December 31st, 2019)
  9. Davidson Kempner Capital Management ($34.8 Billion as on January 31st, 2021)
  10. Citadel Investors ($33.1 Billion as on March 31st, 2021)