What is a Hedge Fund?

• Hedge funds derived their name from being long and short, thus “hedged” or protected to some degree against market uncertainties
• The term hedge fund refers to an investment structure, not an investment approach
• Hedge funds are diverse and complex - a wide range of tools and investment strategies are used to build and manage a portfolio
• There are now more hedge funds than public US stocks
• The first acknowledged hedge fund was started by Alfred Jones in 1949. His goal was to reduce market risk and focus on security selection

Common Attributes

• Focus on generating absolute versus relative returns
• Returns not strongly correlated with general market movements
• Private funds, usually limited partnerships or limited liability companies
• Hedge fund managers generally make a substantial personal investment in their own funds