A Hedge Fund is private investment fund which provides a hedge against market conditions and tries to make profit from buying/selling hedged positions. The Hedge Fund is not simple in practice. On a global basis there is over a trillion dollars of private investment capital that can literally invest in any commodity, currency indeses and stocks and bonds. Unlike traditional investing the Hedge Fund may go long or short the market. It is private equity and therefore the gains on transactions for fund owners is taxed differently that normal capital gains taxes.
A typical Hedge Fund is formed by individual investors who have a stake in the fund. The buy-in is in the millions. Noted Hedge Fund owners are George Soros and the Blackstone Group founded by Peter G. Peterson and Stephen A. Schwarzman. The Blackstone Group is a fairy tale. The Blackstone Group was founded by Peter G. Peterson and Stephen A. Schwarsman. According to the Blackstone Group corporate biography the iniital private funds in 1985 were $400,000. By forging alliances and partnerships with some of the most well-heeled on Wall Street their assets under management are over 88.5 billion dollars. Continue reading