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an investing group usually in the form of a limited partnership that employs speculative techniques in the hope of obtaining large capital gains

The trust, which owned corporate stocks and a

, produced $87,000 in income that year for Beto and Amy ORourke.

, Rich father-in-law has helped, complicated ORourkes career, 6 July 2019

Known as funds of funds, the investment firms that promise access to

are also fighting to survive, as many investors have balked at paying them an extra layer of fees.

, Backer of Well-Known Hedge Funds Shuts Down, 26 June 2019

But there was a huge run a panic by institutional investors (pension funds,

, insurance companies, endowments) that withdrew funds from traditional banks, investment banks and the commercial paper market.

, Robert Samuelson: Tear up the (economic) textbooks and start over!, 26 June 2019

Bitcoins volatility has been a boon to larger investors such as

, and other investors searching for returns as central banks across the world lean towards lower interest rates, said Puech.

, Bitcoin hits a 15-month high, propelled by Facebooks Libra cryptocurrency, 24 June 2019

Dan Loeb, activist investor and head of the Third Point

, last week called on Sony Corp. to break up its electronics and entertainment units into separate businesses.

, Sony CEO Kenichiro Yoshidas Annual Pay Fell to $3.67M, 18 June 2019

The expedition is funded by OceanX, a project of the family of

billionaire Ray Dalio, and by Bloomberg Philanthropies Vibrant Oceans Initiative, backed by former New York Mayor Michael Bloomberg.

, Search and rescue: Researchers on mission to save the coral reefs of South Florida, 12 June 2019

But operating video gambling machines in Illinois has become big business, attracting national casino companies, private equity and

as well as wealthy real estate investors, records show.

, Illinois Video Gambling Tax Hike Will Be Decided by Lawmakers With Financial Ties to the Industry, 10 June 2019

best known for buying distressed debt, is suing the government for damages under KORUS, a free-trade deal with America.

, South Koreas left-wing president loses his zeal to humble big business, 22 June 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word hedge fund. Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors.Send us feedback.

Ahedge fundis aninvestmentstructure designed to allow management of a private, unregistered portfolio of assets.

The original concept of ahedge fundwas toofferplays against themarketusingshort sellingfutures, andderivatives. Today, hedge funds follow any number of strategies and cannot be considered a homogenousasset class.

Hedge funds (as an asset class) use various strategies, includingleveragehedging, and macroeconomic bets on commodities, currencies, and interest rates. The common denominator of hedge funds is not theirinvestmentstrategy but their search for absolute returns (as opposed to relative returns). Absolute return strategies focus on generating a positivereturn on investment (ROI)regardless of the direction of thefinancial markets.

Hedge fund managers seek freedom to achieve high absolute returns and wish to be rewarded for their performance. The compensation arrangement for the manager typically specifies considerableprofitparticipation. The specific legal organization of hedge funds and the considerable fee structure expected byfundmanagers are probably the only uniform characteristics of hedge funds.

Only accredited investors are eligible to invest in hedge funds. The termaccredited investorincludeswealthyindividuals and organizations like corporations, endowments, or pensionfunds. Accredited investors invest in hedge funds because they are looking forinvestmentswithnegative correlationto the broad market.

Because they operate outside the realm of the public markets and are lightly regulated, hedge funds have been declared off limits to most individual investors. Some say the lack of oversight paired with the high-risk, high-return strategies employed by most hedge funds have resulted in some of the worlds most catastrophic financial events, including the failure of Long-TermCapitalManagement in 1998 and the collapse of two Bear Stearns hedge funds in 2007.

That being said, all investors, regardless of experience and sophistication, need to perform extensivedue diligencebeforeinvestingin any hedge fund. Before investing in a hedge fund, an investor needs to consider the correlation of thefundstrategy to the rest of the investors portfolio, the reputation and success rate of thefund manager, the use ofleverage, as well as the fee schedule.

See the full definition forhedge fundin the English Language Learners Dictionary

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