Hedge Fund

A hedge fund is an investment vehicle that pools capital from accredited investors or institutional investors to invest in a variety of assets with the goal of generating high returns. Unlike mutual funds, hedge funds have more flexibility in their investment strategies, which may include leveraging, short selling, derivatives, and investing in illiquid assets. Hedge funds typically charge both a management fee and a performance fee, which can incentivize managers to pursue higher returns. They are often structured as limited partnerships, with the fund manager serving as the general partner and investors as limited partners. Due to their sophisticated strategies and less regulation compared to traditional investment funds, hedge funds are generally accessible only to wealthy individuals and institutional investors.