Hedge fund and Wikipedia:WikiProject James Bond: Difference between pages

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A [[hedge fund]] is a private [[investment fund]] charging a performance fee and typically open to only a limited number of investors. Hedge Funds have grown in size and influence on the public securities and private investment markets. Hedge Funds are not currently subject to any direct regulation, unlike mutual funds, pension funds, and insurance companies.

| height="30" colspan="2" style="padding:0.2em; background:darkred; border: solid thin #80737C; color:#FFFF00; text-align:center;" | '''WikiProject James Bond'''

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| height="80" colspan="2" valign="top" style="padding:0.2em; background:#f9f9ff; border: solid thin #80737C; text-align:center | {{shortcut|WP:007|WP:BOND|WP:OO7}} <big> '''Welcome to WikiProject James Bond'''</big>.<br>

The James Bond WikiProject exists to help improve the encyclopedic content of [[James Bond]]-related articles, [[:Category:WikiProject James Bond articles|from novels and films to characters and gadgets]].

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The term is not tightly defined, but is used to distinguish such funds from retail investment funds that are available to the general public. An example of such retail funds in the US are [[Mutual Fund]]s. Retail funds tend to be highly regulated, limited to holding -- being [[long (finance)|long]] of -- a specific range of financial assets such as [[Bond (finance)|bonds]], [[equities]] or [[money market]] instruments. Retail funds tend to have a restricted ability to borrow, leverage or hedge their investments, though they may have a limited ability to hedge via derivative contracts.

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Hedge funds are limited only by the terms of the contracts governing the particular fund. Hedge funds may be either long or [[Short selling|short]] assets and may enter into [[futures contract|futures]], [[swaps]] and other [[derivative (finance)|derivative]] contracts. In this way, hedge funds are able to follow more complex investment strategies intended to profit from market volatility or from falling market.

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Because of the substantial risks involved in unregulated, complex and leveraged investments, hedge funds are normally open only to professional, institutional or otherwise [[accredited investor]]s. This restriction is often implemented though limits on investor numbers or minimum investment amounts.

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== Origins and development ==

*A new [[Wikipedia:WikiProject James Bond/Collaboration of the fortnight]] section has been added, please contribute.

* Both '''Casino Royale''' and '''GoldenEye''' failed for featured article status.

* Wiki Project James Bond Up and Away on 17 April 2007.

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The term ''hedged fund'' dates back to a fund founded by [[Alfred Winslow Jones]] in [[1949]]. Jones's fund advisor, A.W. Jones was to [[Short selling|sell short]] some [[stock]]s while buying others, thus some of the [[market risk]] was [[hedging|hedged]]. Jones is often credited with founding the first hedge fund, but many "investment pools", "investment syndicates", "investment partnerships" or "opportunity funds" that would today be considered hedge funds were in operation long before. Managers included [[Jesse Livermore]], [[Bernard M. Baruch]] and [[Benjamin Graham]].

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While most of today's [[hedge (finance)|hedge]] funds still trade stocks both [[long (finance)|long]] and [[sell short|short]], many do not trade stocks at all, instead focusing on other [[financial instruments]] including commodity futures, options and emerging market debt.

* Added plot summaries to the leads of [[Goldfinger (film)]], [[On Her Majesty's Secret Service (film)]], [[Diamonds Are Forever (film)]], [[The Man with the Golden Gun (film)]], [[The Spy Who Loved Me (film)]], [[A View to a Kill]] and [[Licence to Kill]]. ([[User:IzzyVanHalen|Callum J. Stewart]] 14:19, 24 April 2007 (UTC)) EDIT: added summaries to the leads of [[Dr. No (film)]], [[Live and Let Die (film)]] and [[For Your Eyes Only (film)]] ([[User:IzzyVanHalen|Callum J. Stewart]] 22:34, 24 April 2007 (UTC))

[[Asset management|Assets under management]] of the hedge fund industry totaled $1.225 trillion at the end of the second quarter of 2006 according to the recently released data by Chicago-based [[Hedge Fund Research Inc]]. (HFR). This was up 19% on the previous year and nearly twice the total three years earlier. Because hedge funds typically use [[leverage (finance)|leverage/gearing]] or debt to invest, the positions they can take in the financial markets are larger than their assets under management. The number of hedge funds increased 10% during the past year to reach around 9,000 according to HFR. Research conducted by [[TowerGroup]] predicts that hedge fund assets will grow at an annualised rate of 15% between 2006 and 2008 while the actual number of hedge funds is likely to remain relatively flat.{{facts}}

* Added a plot summary to [[You Only Live Twice (film)|You Only Live Twice]]. [[User:Editus|Editus]] 1800 UTC 23.4.07 EDIT: did the same for [[Thunderball (film)|Thunderball]] 1907 UTC 23.4.07

* Overhauled the [[Octopussy]] page to resemble CR (06), still needs referenceing, but got rid of useless trivia and put in [[Talk:Octopussy]]. [[User:SpecialWindler|SpecialWindler]] 00:18, 21 April 2007 (UTC)

* Added the template above with the assessment statistics by quality.[[User:SpecialWindler|SpecialWindler]] 23:15, 17 April 2007 (UTC)

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===Comparison to private equity funds===

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Hedge funds are similar to [[private equity]] funds in many respects. Both are lightly regulated, private pools of capital that invest in securities and compensate their managers with a share of the fund's profits. Most hedge funds invest in very [[liquid assets]], and permit investors to enter or leave the fund easily. Private equity funds invest primarily in very illiquid assets such as early-stage companies and so investors are "locked in" for the entire term of the fund. Hedge funds often invest in private equity companies' acquisition funds.{{facts}}

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===User template===

Add '''<nowiki>{{User James Bond}}</nowiki>''' to your user page and sign below to join this WikiProject.

{{Template:User James Bond}}

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==Project Members==

Between 2004 and February 2006, some U.S. hedge funds adopted 25 month lock-up rules expressly to exempt themselves from the SEC's new registration requirements. They now fall under the registration exemption drafted to exempt private equity funds.{{facts}}

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!Member!!Date Joined!!Fav. Bond!! Fav. Film

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|{{User|Ganfon|}}|| [[April 17]] [[2007]] || [[Sean Connery]] || [[Goldfinger (film)|Goldfinger]]

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|{{User|SpecialWindler}}|| [[April 17]] [[2007]] || [[Timothy Dalton]] || [[Casino Royale (2006)]]

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|{{User|23skidoo}}|| [[April 17]] [[2007]] || [[Sean Connery]] || [[Casino Royale (2006)]]

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|{{User|Ernst Stavro Blofeld}} || [[April 17]] [[2007]] || [[Sean Connery]]||[[Goldfinger (film)|Goldfinger]] / [[Live and Let Die]]

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|{{User|Warlordjohncarter}} || [[April 17]] [[2007]] || ||

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|{{User|El Greco}} || [[April 17]] [[2007]] || [[Sean Connery]] ||

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| {{User|K1Bond007}} || [[April 17]] [[2007]] || ||

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| {{User|ColdFusion650}} || [[April 17]] [[2007]] || [[Daniel Craig]] || [[Casino Royale (2006)]]

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| {{User|Chrislk02}} || [[April 17]] [[2007]] || [[Sean Connery]] || [[Goldeneye]]

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| {{User|Cliff smith}} || [[April 17]] [[2007]] || || [[Casino Royale (2006)]]

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| {{User|Will2710}} || [[April 19]] [[2007]] || [[Timothy Dalton]] || [[Casino Royale (2006)]]

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| {{User|Highfields}} || [[April 19]] [[2007]] || [[Pierce Brosnan]] || [[Casino Royale (2006)]]

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|{{User|The Giant Puffin}}|| [[April 22]] [[2007]] || [[Roger Moore]] || [[Goldeneye]]

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|{{User|Snowolf}}|| [[April 22]] [[2007]] || [[Roger Moore]] ||

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|{{User|IzzyVanHalen}}|| [[April 23]] [[2007]] || [[Timothy Dalton]] || [[From Russia With Love]]/[[The Living Daylights]] (tie)

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|<s>{{User|Editus}}</s> (old account)<br>{{User|Editus Reloaded}} || [[April 23]] [[2007]] || [[Sean Connery ]] || [[Goldeneye]]

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|{{User|AldeBaer}}|| [[April 26]] [[2007]] || [[Daniel Craig]] || [[Never Say Never Again]]

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|{{User|Emperor001|}}|| [[April 27]] [[2007]] || [[Sean Connery]] || [[You Only Live Twice]]

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|{{User|Eric1985}}|| [[April 28]] [[2007]] || [[Pierce Brosnan]] || [[Moonraker (film)|Moonraker]]

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|{{User|Zerorules677}}|| [[April 30]] [[2007]] || [[Daniel Craig]] || [[Casino Royale (2006)]]

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|{{User|Vikrant Phadkay}}|| [[May 3]] [[2007]] || [[Pierce Brosnan]] || [[Octopussy]]

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|{{User|Tprosser}}|| [[May 14]] [[2007]] || [[Sean Connery]] || [[From Russia With Love]]

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|{{User|Davidbspalding}}|| [[May 23]] [[2007]] || [[Sean Connery]] || [[On Her Majesty's Secret Service (film)|On Her Majesty's Secret Service]]

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|{{User| Tovojolo}}|| [[June 16]] [[2007]] || [[Sean Connery]] || [[Goldfinger (film)| Goldfinger]]

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|{{User|Namesbondjamesbond}}|| [[June 30]] [[2007]] || [[Daniel Craig]] || [[From Russia with Love (film)|From Russia with Love]]

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==Banner==

===Comparison to U.S. mutual funds===

Please tag relevant articles as '''<nowiki>{{WikiProject James Bond|class=|importance=}}</nowiki>'''

Like hedge funds, [[mutual fund]]s are pools of investment capital. However, the two structures have several differences, including:

{{WikiProject James Bond|class=NA|importance=NA}}

This banner should be used with the project's assessment criteria. Please see [[Wikipedia:WikiProject James Bond/Assessment|here]] for the project's assessment guidelines.

'''Comment''': Can somebody add the importance feature underneath on this template, so we can see the importance of the article without having to go to edit, (I'd do it myself but the syntex stuff too complecated??? [[User:SpecialWindler|SpecialWindler]] 23:19, 17 April 2007 (UTC)

*Mutual funds are regulated by the SEC, while hedge funds may not be{{fact}}

*A hedge fund investor must be an [[accredited investor]]{{fact}}

*Mutual funds must price and be liquid on a daily basis{{fact}}

::If you look at the bottom of the page, where all the categories are listed, it is listed there. ^{[[User:{{{User|El Greco}}}|{{{User|El Greco}}}]] ([[User talk:{{{User|El Greco}}}|talk]] <small>•</small> [[Special:Contributions/{{{User|El Greco}}}|contribs]])} 00:45, 18 April 2007 (UTC)

Additionally, mutual funds must have a prospectus available to anyone that requests them (either electronically or via US postal mail), and must disclose their asset allocation quarterly, while hedge funds do not have to abide by these terms. Hedge funds also frequently do not have daily liquidity, but rather "lock up" periods of time where the total returns are generated (net of fees) for their investors and then returned when the term ends, through a passthrough requiring CPAs and US Tax W-forms. Lots of people tolerate the nature of hedge funds over mutual funds because they usually generate higher total returns for their investors versus mutual funds.

==Recognized content==

Recently, however, the mutual fund industry has created products with features that have traditionally only been found in hedge funds.

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<br><br><br><br><br>

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*[[Casino Royale (2006 film)]]

*[[Thunderball (novel)]]

*[[GoldenEye]]

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*[[James Bond]]

*[[Pierce Brosnan]]

*[[Sean Bean]]

*[[The World Is Not Enough (song)]]

*[[Tomorrow Never Dies]]

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== Open tasks ==

Mutual funds have appeared which utilize some of the trading strategies noted above. Grizzly Short Fund (GRZZX), for example, is always net short, while Arbitrage Fund (ARBFX) specializes in [[merger arbitrage]]. Such funds are SEC regulated, but they offer [http://stocksandmutualfunds.com/hedge-fund-mutual-funds.html hedge fund strategies] and protection for mutual fund investors.

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* Survey articles to make sure a balance is maintained between film and novel references where applicable; it should not be forgotten that the books came first (there are occasional articles such as [[List of James Bond henchmen]] that profess to reference the novels but only contain film-based information). Articles on characters that appear in both the novels and the films should always include information on their literary counterparts.

Also, a few mutual funds have introduced performanced-based fees, where the compensation to the manager is based on the performance of the fund. However, under Section 205(b) of the [[Investment Advisers Act of 1940]], such compensation is limited to so-called "fulcrum fees".[http://www.law.uc.edu/CCL/InvAdvAct/sec205.html] Under these arrangements, fees can be performance-based so long as they increase and decrease symmetrically.

*Occasionally review all articles that have been placed on the [[:Wikipedia:WikiProject James Bond/Articles]] page for [[Special:Recentchangeslinked/Wikipedia:WikiProject James Bond/Articles|recent changes]].

*Cite sources on [[James Bond]]. This will greatly help it to featured status, the current Mission of the Week.

For example, the TFS Capital Small Cap Fund (TFSSX) has a management fee that behaves, within limits and symmetrically, similarly to a hedge fund "0 and 50" fee: A 0% management fee coupled with a 50% performance fee if the fund outperforms its benchmark index. However, the 125 bp base fee is reduced (but not below zero) by 50% of underperformance and increased (but not to more than 250 bp by 50% of outperformance. [http://www.tfscapital.com/products/mutual/files/Prospectus.pdf]

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* Resolve the issue of [[Casino Royale (1967 film)|Casino Royale (1967)]] being considered an unofficial Bond film by adding applicable sources to this and related articles, preferably books or media coverage.

== Fees ==

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Usually the hedge fund manager will receive both a management fee and a performance fee. As with other investment funds, the management fee is computed as a percentage of assets under management. Management fees might typically be 1.5% or 2.0% but may range from 0% to 5%. {{facts}}

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=== PerformanceCategories fees ===

* [[:Category:Films]]

Performance fees, which give a share of positive returns to the manager, are one of the defining characteristics of hedgefunds. The performance fee is computed as a percentage of the fund's profits. Typically, hedge funds charge 20% of gross returns as a performance fees, but again the range is wide, with highly regarded managers demanding higher fees. In particular, [[Steven A. Cohen|Steven Cohen]]'s [[SAC Capital Partners]] charges a 50% incentive fee (but no management fee) and [[James Harris Simons|Jim Simons]]' [[Renaissance Technologies]] Corp. charged a 5% management fee and a 44% incentive fee in its flagship Medallion Fund before returning all investors' capital and running solely on its employees' money.{{facts}}

<categorytree>James Bond</categorytree>

==Films==

Performance fees exist because investors are usually willing to pay managers more generously when the investors have themselves made money. For managers who perform well the performance fee is extremely valuable.

<center>{{tl|Bond movies}}</center>

{{Bond movies}}

=== Hurdles ===

Funds may also specify a 'hurdle', which signifies that the fund will not charge a performance fee until its annualized performance exceeds a benchmark rate, such as [[Treasury security|USD 90-day T-bills]] or a fixed percentage. Rules as to what period should be considered for the hurdle vary from fund to fund, but it most commonly covers the current fiscal year.

==Characters==

Sometimes the performance fees are levied only after a performance "Hurdle" has been met. A common practice is to use a hurdle rate linked to short term interest rates, for example 3 month LIBOR in the fund currency. This links performance fees to the ability of the manager to do better than the investor would have done if he had put the money in a bank account.

<center>{{tl|James Bond characters}}</center>

{{James Bond characters}}

Though logically appealing, this practice has diminished as demand for hedge funds has outstripped supply and hurdles are now rare. {{facts}}

==Books==

=== High water marks ===

<center>{{tl|Bond books}}</center>

A "High water mark" is usually used. {{facts}} This means that the manager does not receive incentive fees unless the value of the fund exceeds the highest value it has previously achieved. For example, if a fund was launced at a NAV of 100 and rose to 130 in its first year, a performance fee would be payable on the 30% return. If the next year it dropped to 120, no fee is payable. If in the third year the NAV rises to 143, a performance fee will be payable only on the 10% return from 130 to 143 (which is 10%) rather than on the full return from 120 to 143.

{{Bond books}}

This measure is intended to link the manager's interests more closely to those of investors and to reduce the incentive for managers to seek volatile trades. If a high water mark is not used, a fund that ends alternate years at 100 and 110 would generate performance fee every other year, enriching the manager but not the investors. However, this mechanism does not provide complete protection to investors as a manager that has lost money may simply decide to close the fund and start again with a clean slate -- provided, of course, he can persuade investors to trust him with their money.

==User Templates==

=== Problems with performance fees ===

{{main|Wikipedia:WikiProject James Bond/User Templates}}

Criticism is heaped upon hedge funds by investigative journalist [[Gary Weiss]] in his caustic 2006 book ''Wall Street Versus America'', which contends that hedge funds have evolved into little more than high-fee [[mutual funds]].

== Parent projects ==

Performance fees have been criticised by many people including notable investor [[Warren Buffett]] for giving managers an incentive to take risk, possibly excessive risk, as well as to seek high long-term returns. A fund that may gain $100M in one year and lose $100M in the next year may pay its managers a performance fee of $20M or more for the profitable year, although overall the nominal return is zero and the real return after fees is negative.

* [[Wikipedia:WikiProject Film]]

* [[Wikipedia:WikiProject Novels]]

== Legal structure ==

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Legal structure is usually determined by the tax environment of the fund investors. Many Hedgefunds are [[Domicile_%28law%29|domiciled]] -- have their legal residence -- [[Offshore_fund|offshore]] in countries unrelated to either the manager, investor or investment operations of the fund, with the objective of making tax payable only by the investor and not additionally by the fund.

[[Category:WikiProject James Bond]]

For U.S-based investors who pay tax, hedge funds are often structured as [[limited partnership]]s because these receive relatively favourable tax treatment in the US. The hedge fund manager is the general partner or manager and the investors are the limited partners or members respectively. The funds are pooled together in the partnership or company and the general partner or manager makes all the investment decisions. {{facts}}

Non-US investors and U.S. entities that do not pay tax (such as [[Pension|pension funds]]) do not receive the same benefits from limited partnerships, and funds for these investors are often structured as [[Offshore_fund|offshore]] or [[unit_trust|unit trusts]] or [[Investment_company]]. Hybrid or "[[Master-feeder]] " structures that contain both a US limited partnership and an offshore company allow hedge funds to attract capital from several different tax regimes.

At the end of 2004, 55% of the number of hedge funds, managing nearly two-thirds of total hedge fund assets, were registered [[Offshore Financial Centre|offshore]]. The most popular offshore ___location was the [[Cayman Islands]] followed by [[British Virgin Islands]] and [[Bermuda]]. The [[United States|U.S.]] was the most popular [[onshore]] ___location accounting for 34% of the number of funds and 24% of assets. [[European Union|EU]] countries were the next most popular ___location with 9% of the number of funds and 11% of assets. Asia accounted for the majority of the remaining assets. {{facts}}

Onshore locations are far more important in terms of the ___location of hedge [[fund manager]]s. [[New York City]] and the [[Gold Coast (Connecticut)|Gold Coast]] area of [[Connecticut]] (particularly Stamford, Connecticut and Greenwich, Connecticut) together are the world's leading ___location for hedge fund managers with about twice as many hedge fund managers as the next largest centre, [[London]]. This is not surprising considering that the US is the source of the bulk of hedge fund investments. London is Europe’s leading centre for the management of hedge funds. At end-2005, three-quarters of European hedge fund investments, totalling $300bn, were managed within the UK, the vast majority from London. Assets managed out of London grew more than fourfold between 2002 and 2005 from $61bn to $225bn. [[Australia]] was the most important centre for the management of [[Asia-Pacific]] hedge funds. Managers located there accounted for around a quarter of the $115bn in Asia-Pacific hedge funds’ assets in 2005. [http://www.ifsl.org.uk/uploads/CBS_Hedge_Funds_2006.pdf]

Hedge funds that have filed for [[IPO]]s have done so outside the [[US|United States]]. Although widely reported as a "hedge-fund IPO" [http://www.marketwatch.com/news/story/story.aspx?siteid=mktw&guid=%7B8CF79DC0-8C69-49D3-907B-153CF689B082%7D], the Fortress Investment Group LLC IPO filed November 8, [[2006]] is for the sale of the manager, not of the hedge funds it manages.[http://www.sec.gov/Archives/edgar/data/1380393/000095013606009310/file1.htm]

==Strategies==

The bulk of hedge fund assets are invested in funds that employ "long / short" equity strategies. Other hedge funds use alternative strategies such as [[Short selling|short bias]], [[arbitrage]], trading [[option (finance)|options]] or [[Derivative (finance)|derivatives]], using [[leverage (finance)|leverage]], investing in seemingly undervalued securities, trading commodity and FX contracts, and attempting to take advantage of the spread between current market price and the ultimate purchase price in situations such as mergers. Many strategies acquire the risk of catastrophic losses as in the case of [[Long-Term Capital Management]].{{facts}}

===Equity Long Short===

Equity long short is currently (3Q 2006) the most ubiquitous hedge fund strategy globally representing some 27% of North American hedge fund assets, 38% in Europe and 69% in Asia. Equity long short investing involves buying long equities that are expected to increase in value and selling short equities that are expected to decrease in value either in absolute terms or in relative terms.{{facts}}

Typically equity long short investing is based on what is termed 'bottom up' fundamental analysis of companies driving the decisions whether to hold a stock long or sell it short. There is usually also a 'top down' basis for risk managing the equity portfolio to diversify risk by geography, industry, sector and macroeconomic factors. With time various evolutions of this strategy have emerged.

The equity long short space is rich with variety. Within equity long short managers there are those who specialize in a value approach or a growth approach. Similarly there are a variety of trading styles where a manager may be a more frequent or dynamic trader or a more long term investor. There are managers who focus on certain industries and sectors or certain regions.

A special subset of equity long short manager is the so-called Market Neutral equity manager. Here, the long and short portfolios of the fund are balanced so that some form of market neutrality is achieved. This neutrality can be characterised with respect to the dollar exposure, which is the simplest metric, or it can be characterised with respect to [[Beta coefficient|beta]]-adjusted dollar exposure which balances the equity positions based on their sensitivity to the market as a whole. Depending on the managers' choice of benchmark(s), market neutrality can be imposed at the global portfolio level or it can more rigorously be imposed at the regional, industry or sector or market capitalization level resulting in a more tightly hedged portfolio.

Typical risk metrics for equity long short funds are gross and net exposures. Gross exposure equals long exposure plus the absolute value of short exposure. For example, for 100 USD of capital, if a fund is 150 USD long and 50 USD short, it means that gross exposure is 150 + 50 = 200 USD or 200%. Net exposure is long exposure less short exposure and in our example above would be 100 - 50 = 50 USD or 50%.

The market neutral definition typically admits a variation of plus to minus 10% in net exposure. {{fact}}

Equity Long/Short funds and-- to a lesser extent-- Equity Market Neutral funds can manage exposure through the use of derivatives such as options or futures on market indexes. Some managers refer to this technique as the provision of [[Portable Alpha]].

===Risk arbitrage===

{{Main|Risk arbitrage}}

One strategy is to buy shares of a company that has announced it is being purchased. When a [[mergers and acquisitions|merger or acquisition]] is announced, the target company (the one being acquired) and the acquirer (the one buying) disclose deal terms, or the premium that the acquirer will pay for the target. In almost all cases, the target's current share price is below the premium that will be paid for it at the completion of the merger, so arbitragers will buy the target company's now undervalued shares. This strategy is very risky; hence the name. There is no assurance the merger will be finalized and several factors such as regulatory approval, shareholder approval, and the possibility of other acquiring companies entering the picture account to this. As the announced merger's effective date gets closer and the more approval the merger gains, the closer the target's share price will get to the premium offered, so every detail of the merger process is very important.

When the acquiring company is offering to buy the target for cash and its own stock, the trader will short sell the stock of the acquiring company, the appropriate number of shares being decided by cash/stock ratio of the deal terms, in addition to buying the stock of the target in order to lock in the spread between the target's current price and the deal terms. This process is called "setting a spread".

The reversal of this process is called "unwinding a spread", and is the equivalent of exiting the position. There is also a risk arbitrage strategy of betting against the completion of a merger by selling the target short, and buying the acquirer's shares; traders engaged in this strategy are known as "Reversers".

Most of the early hedge funds employed this strategy. They became very popular as a way of seeing gains better than the investment grade bond market, while still having low risk.

However the side effect of this popularity was to dramatically increase the interest in all of the non-standard investment strategies, and soon other funds were being set up with new strategies aimed primarily at high growth. Although there is no hedging in these cases, the term is still used for these funds as well.

Some people break the hedge fund universe into seven broad classifications: (1) event driven, (2) fixed-income arbitrage, (3) global convertible bond arbitrage, (4) equity market-neutral, (5) long/short equity, (6) global macros, and (7) commodity trading.{{fact}}

===Event driven strategies===

'''Event driven''' strategies are unaffected by the general direction of markets or national policies. The ''events'' that drive event-driven funds are specific to enterprises -- chiefly [[corporate merger|mergers]], takeovers, [[bankruptcy|bankruptcies]], and the issuance of [[security (finance)|securities]].

Because of its concern with micro triggering events, this family of strategies is also sometimes called ''bottom up'' as opposed to ''top down''.

Sometimes an event-driven hedge fund will focus upon one of those bottom-up strategies in particular, in which case it may be referred to as a [[risk arbitrage]], a [[distressed securities]], or a [[Regulation D]] fund, whichever name then applies.

But event-driven multi-strategy funds, as the term implies, can keep a finger in each of those pies. This provides diversification and evens out results over the [[business cycle]], because while merger-oriented funds (i.e. risk arbitrageurs) and Regulation D funds (concerns with small-cap securities issuance) are busiest during times of boom, the distressed-securities strategy finds amplest opportunities during times of bust.

=== Fund of hedge funds ===

{{main|Fund of funds}}

A ''[[fund of funds|Fund of hedge funds]]'' is a special type of [[hedge fund]] that invests in a portfolio of other hedge funds rather than trading assets directly.

Fund of hedge funds either invest directly into the hedge funds by buying shares or offer investors access to managed or segregated accounts which mirror the performance of the hedge fund. Managed accounts offer investors advantages such as daily risk reporting and protectection if the hedge fund goes into liquidation. However, relatively poor performance of investible hedgefund indices suggests that successful managers may be unwilling to provide managed accounts.{{facts}}

Some jurisdictions consider funds of funds to be more suitable for retail investors than other hedgefunds because of the diversification they offer is believed to reduce risk. For example in the US funds of funds may be specially registered with the SEC, allowing them to accept investments from individuals who are not accredited investors or "financially sophisticated individuals" (defined term by the SEC, which subjectively includes those individuals whose financial sophistication allows them to make investment decisions without the protection of registration under Section 5), and often have lower investment minimums (sometimes as low as $25,000).{{facts}}

Funds of funds carry an additional layer of fees, typically a 1% management fee and up to a 10% performance fee.{{facts}} In addition to due diligence investigations and diversification, most funds of funds claim {{facts}} to add value by picking superior managers, or by dynamic allocation between different hedge funds strategies. Such claims are required to justify their performance fees but are not strongly supported by historic data {{facts}}.

== Regulatory Issues ==

Part of what gives hedge funds their competitive edge, and their cachet in the public imagination, is that they straddle multiple definitions and categories; some aspects of their dealings are well-regulated, others are unregulated or at best quasi-regulated.

=== Background on US regulatory issues ===

The typical investment company in the United States is required to be registered with the [[U.S. Securities and Exchange Commission]] (SEC). Mutual funds are the most common type of registered investment companies. Aside from registration and reporting requirements, investment companies are subject to strict limitations on short-selling and the use of leverage. There are other limitations and restrictions placed on investment company managers, including the prohibition on charging incentive or performance fees.

Although hedge funds fall within the statutory definition of an investment company, hedge funds elect to operate pursuant to exemptions from the registration requirements. The two major exemptions are set forth in Sections 3(c)1 and 3(c)7 of the [[Investment Company Act of 1940]]. Those exemptions are for funds with fewer than 100 investors (a "3(c)1 Fund") and funds where the investors are "qualified purchasers" (a "3(c)7 Fund"). [http://www.law.uc.edu/CCL/InvCoAct/sec3.html] A qualified purchaser is an individual with over US$5,000,000 in investment assets. (Some institutional investors also qualify as accredited investors or qualified purchasers.) [http://www.law.uc.edu/CCL/InvCoAct/sec2.html] A 3(c)1 Fund cannot have more than 100 investors, while a 3(c)7 Fund can have an unlimited number of investors. Both types of funds can charge performance or incentive fees.

In order to comply with 3(c)(1) or 3(c)(7), hedge funds are sold via private placement under the [[Securities Act of 1933]]. Thus interests in a hedge fund cannot be offered or advertised to the general public, and are normally offered under Regulation D. Although it is possible to have non-accredited investors in a hedge fund, the exemptions under the Investment Company Act, combined with the restrictions contained in Regulation D, effectively require hedge funds to be offered solely to accredited investors. [http://www.law.uc.edu/CCL/33ActRls/rule501.html]. An accredited investor is an individual with a minimum net worth of US$1,000,000 or, alternatively, a minimum income of US$200,000 in each of the last two years and a reasonable expectation of reaching the same income level in the current year.

The regulatory landscape for Investment Advisors is changing, and there have been attempts to register hedge fund investment managers. There are numerous issues surrounding these proposed requirements. One issue of importance to hedge fund managers is the requirement that a client who is charged an incentive fee must be a "qualified client" under [[Investment Advisers Act of 1940|Advisers Act]] Rule 205-3. To be a qualified client, an individual must have US$750,000 in assets invested with the adviser or a net worth in excess of US$1.5 million, or be one of certain high-level employees of the investment adviser. [http://www.law.uc.edu/CCL/InvAdvRls/rule205-3.html]

For the funds, the tradeoff of operating under these exemptions is that they have fewer investors to sell to, but they have few government-imposed restrictions on their investment strategies. The presumption is that hedge funds are pursuing more risky strategies, which may or may not be true depending on the fund, and that the ability to invest in these funds should be restricted to wealthier investors who are presumed to be more sophisticated and who have the financial reserves to absorb a possible loss. {{facts}}

===Recent US regulatory development===

In December [[2004]], the SEC issued a rule change that required most hedge fund advisers to register with the SEC by [[February 1]], [[2006]], as investment advisers under the Investment Advisers Act.[http://sec.gov/rules/final/ia-2333.htm] The requirement, with minor exceptions, applied to firms managing in excess of US$25,000,000 with over 15 investors. The SEC stated that it was adopting a "risk-based approach" to monitoring hedge funds as part of its evolving regulatory regimen for the burgeoning industry.[http://sec.gov/rules/final/ia-2333.htm#P78_37183] The rule change was challenged in court by a hedge fund manager, and in June 2006, the U.S. Court of Appeals for the District of Columbia overturned it and sent it back to the agency to be reviewed. See [http://www.seclaw.com/docs/ref/GoldsteinSEC04-1434.pdf Goldstein v. SEC].

Although the SEC is currently examining how it can address the Goldstein decision, commentators have stated that the SEC currently has neither the staff nor expertise to comprehensively monitor the estimated 8,000 U.S. and international hedge funds. See [http://www.seclaw.com/docs/NewHedgeFundAdvisorRule.htm New Hedge Fund Advisor Rule]. One of the Commissioners, [[Roel Campos]], has said that the SEC is forming internal teams that will identify and evaluate irregular trading patterns or other phenomena that may threaten individual investors, the stability of the industry, or the financial world. "It's pretty clear that we will not be knocking on [hedge fund] doors very often," Campos told several hundred hedge fund managers, industry lawyers and others. And even if it did, "the SEC will never have the degree of knowledge or background that you do."{{fact}}

=== Recent UK regulatory developments===

In recent years, HM Revenue and Customs, formerly [[Inland Revenue]], has adopted interpretations of the tax laws that seem likely to keep many funds offshore. One change was in [[June 2005]], The United Kingdom's [[Financial Services Authority]] published two discussion papers about hedge funds -- one concerning systemic risks, the other on consumer protection. Due to the same concerns, later in the year the FSA created an internal team to supervise the management of 25 particularly high-impact hedge funds doing business within the UK. {{facts}}

Another regulatory body, the Takeover Panel, is reportedly concerned about the use by hedge funds of instruments known as [[contracts for difference]], which it worries may have opaque effects on mergers and acquisitions.{{fact}}

=== Privacy issues ===

As private, lightly regulated partnerships, hedge funds do not have to disclose their activities to third parties. This is in contrast to a fully regulated [[mutual fund]] (or unit trust) which will typically have to meet regulatory requirements for disclosure. The hedge funds are typically domiciled in an [[Offshore Financial Centre|offshore jurisdiction]], such as [[Bermuda]], [[Cayman Islands]], [[British Virgin Islands]], where regulation of investment funds permits wider powers of investment (the Cayman Islands have been estimated to be home to about 75% of world’s hedge funds, with nearly half the industry's estimated $1.225 trillion [[Assets under management|AUM]]<ref>''Institutional Investor'', 15 May 2006, [http://www.dailyii.com/article.asp?ArticleID=1039798&LS=EMS73445 Article Link], although statistics in the Hedge Fund industry are notoriously speculative</ref>). Hedge funds have to file accounts and conduct their business in compliance with the less stringent requirements of these offshore centres. Investors in hedge funds enjoy a higher level of disclosure than investors in mutual funds including detailed discussions of risks assumed, significant positions, and investors usually have direct access to the investment advisors of the funds. This high level of disclosure is not available to non-investors, hence the notion of privacy attached to hedge funds.

A byproduct of this privacy and the lack of regulation is that there are no official hedge fund statistics. An industry consulting group, HFR (hfr.com), reported at the end of the second quarter [[2003]] there are 5660 hedge funds world wide managing $665 billion. To put that in perspective, at the same time the US mutual fund sector held assets of $7.818 trillion (according to the Investment Company Institute). {{facts}}

The combination of privacy and rich investors means that hedge funds are a target for criticism whenever markets move against some group's interests. For example, hedge funds were widely blamed for the speculative run-up in the bond market that preceded the global bond crisis of [[1994]], although the major players in the bond spree were actually large commercial and [[investment bank]]s.

{{fact}}

==Criticism==

===Questionable propriety===

The [[U.S. Senate]] [[U.S. Senate Committee on the Judiciary|Judiciary Committee]] began an investigation into the propriety of Hedge Funds on June 28, 2006. The hearings have been recently reported on by CNBC, Bloomberg, and Marketwatch after a New York Times article exposed an investigation by Gary Aguirre, an investigating attorney, who was recently fired by the SEC. [http://www.nytimes.com/2006/06/23/business/23fund.html] [http://www.nytimes.com/2006/06/26/business/26hedge.html?_r=1&oref=slogin]

===Systemic risk===

Hedge funds came under heightened scrutiny as a result of the failure of [[Long-Term Capital Management]] (LTCM) in 1998, which necessitated a bailout coordinated by the U.S. [[Federal Reserve]]. Critics have charged that hedge funds pose systemic risks highlighted by the LTCM disaster.

The ECB ([[European Central Bank]]) has issued a warning on hedge fund risk for financial stability and systemic risk:

"... the increasingly similar positioning of individual hedge funds within broad hedge fund investment strategies is another major risk for financial stability which warrants close monitoring despite the essential lack of any possible remedies. This risk is further magnified by evidence that broad hedge fund investment strategies have also become increasingly correlated, thereby further increasing the potential adverse effects of disorderly exits from crowded trades." [http://www.ecb.int/pub/pdf/other/financialstabilityreview200606en.pdf ECB Financial Stability Review June 2006, p. 142]

[[The Times]] wrote about this review:

"In one of the starkest warnings yet from an official institution over the role of the burgeoning but secretive industry, the [[European Central Bank|ECB]] sounded a note of alarm over the possible repercussions from any collapse of a hedge fund, or group of funds."

[http://business.timesonline.co.uk/article/0,,16849-2208194,00.html Gary Duncan, Economics Editor, June 02, 2006]

However, the ECB statement itself has been criticized by a part of the financial research community, some of their arguments can be found in this paper [http://www.edhec-risk.com/edito/RISKArticleEdito.2006-07-27.4050/attachments/EDHEC%20response%20to%20ECB%20statement%20on%20HFs.pdf].

There were few notable casualties among hedge funds in the year [[2006]], whose go-anywhere investment approach is an invitation to mischief.[http://www.baltimoresun.com/business/investing/bal-bz.petruno26dec26,1,5699760,print.story?ctrack=1&cset=true]

===Poor performance===

Critics also maintain that hedge fund performance has suffered as aggregate asset sizes have climbed.

In 2005, [[Princeton University]] professor and noted financial theorist [[Burton G. Malkiel]] published a paper maintaining that hedge funds systematically underperform the market averages[http://www.cfapubs.org/doi/pdf/10.2469/faj.v61.n6.2775]. Malkiel contended that hedge fund indexes, particularly prior to 1995, were often statistically faulty and overstated hedge fund performance. Hedge funds, however, contested Malkiel's findings.[http://pages.stern.nyu.edu/~adamodar/New_Home_Page/articles/hedgefundreturnbias.htm]

Recent evidence suggests the myth of good performance in all markets is somewhat shaky even for fund of hedge funds. (Source:[http://www.ft.com/cms/s/5e0a2bfa-2e9d-11db-a973-0000779e2340.html]). Although a fund may be market neutral this does not guarantee immunity to market falls. This is because when markets fall, investment is removed (for example into housing) and spreads widen. Wide spreads increase trading costs which are often substantial for arbitrage funds, resulting in a deterioration of performance for some funds. (On the other hand, wide spreads may present a new profit opportunity for funds acting more as market makers.)

Hedge funds may also simply bet wrong, with a high degree of leverage. In September 2006, a US fund [[Amaranth Advisors]]' natural gas trader lost roughly $6 billion of the firm's $9 billion assets on a series of ill-timed trades.

== Hedge fund data ==

=== Top earners ===

''[[Institutional Investor]]'' magazine annually ranks top-earning hedge fund managers. Earnings from a hedge fund are simply 100% of the capital gains on the manager's own equity stake in the fund plus 20% to 50% (depending on policy) of the gains on the other investors' capital.

The 2004 top earner was [[Edward Lampert]] of [[ESL Investments]] Inc. who earned $1.02 billion during the year ([http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/05-27-2005/0003695485&EDATE= PR Newswire link]).

The 2005 top earner was [[James Harris Simons]] with an earning of $1.5 billion according to Alpha magazine.<ref>{{cite web

| title = $363M is average pay for top hedge fund managers

| work = Institutional Investor, Alpha magazine (USA TODAY article, [[26 May]], [[2005]])

| url = http://www.usatoday.com/money/perfi/funds/2006-05-26-hedge-funds-usat_x.htm

| accessdate = May 27

| accessyear = 2006

}}</ref> However, [[Trader Monthly]] reported that Simons only earned about $1 billion and that the top earner was instead [[T. Boone Pickens]] with an estimated earning of over $1.5 billion during the year.<ref>Traders Monthly. [http://paul.kedrosky.com/archives/2006/03/31/top_hedge_fund.html Top Hedge Fund Earners of 2005.]</ref>

The full top 10 list of hedge fund earners according to [[Trader Monthly]] includes:

*1. [[T. Boone Pickens]] - estimated 2005 earnings $1.5bn +

*2. [[Steven A. Cohen]], [[SAC Capital Partners|SAC Capital Advisers]] - $1bn +

*3. [[James Harris Simons|James H. Simons]], [[Renaissance Technologies Corp]]. - $900m - $1bn

*4. [[Paul Tudor Jones]], [[Tudor Investment Corp]]. - $800m - $900m

*5. [[Stephen Feinberg]], [[Cerberus Capital Management]] - $500 - $600m

*6. [[Bruce Kovner]], [[Caxton Associates]] - $500m - $600m

*7. [[Eddie Lampert]], [[ESL Investments]] - $500m - $600m

*8. [[David E. Shaw]], [[D. E. Shaw & Co.|D. E. Shaw &amp; Co.]] - $400m - $500m

*9. [[Jeffrey Gendell]], Tontine Partners - $300m - $400m

*10. [[Louis Bacon]], [[Moore Capital Management]] - $300m - $350m

*10. [[Stephen Mandel]], Lone Pine Capital - $300m - $350m

=== Notable hedge fund management companies ===

Sometimes also known as [[alternative investment management companies]].

* [[Amaranth Advisors]]

* [[Amplitude Capital]] ([http://www.ampcap.com/ website])

* [[Andor Capital Management]] ([https://www.andorcap.com/ website])

* [[Angelo, Gordon & Co.]] ([http://www.angelogordon.com/ website])

* [[Black River Asset Management]] ([http://www.black-river.com/ website])

* [[Bridgewater Associates]]

* [[Cheyne Capital]] ([http://www.cheynecapital.com/ website])

* [[Camelot Global Investment]] ([http://www.camelot-funds.com/ website])

* [[Citadel Investment Group]]

* [[Clinton Group]] ([http://www.Clinton.com/ website])

* [[D. E. Shaw & Co.|D. E. Shaw &amp; Co.]]

* [[Denison & Porter]] ([http://www.denisonporter.com/ website])

* [[Eclectica Asset Management]] ([http://www.eclectica-am.com/ website])

* [[Erste Bank Alternative Investments]] ([http://www.hedgefunds.erstebank.com/ website])

* [[Everest Capital]] ([http://www.everestcapital.com/ website])

* [[Estlander & Rönnlund]]

* [[Fortress Investment Group]] ([http://www.fortressinv.com/ website])

* [[Glacier Capital]] ([http://www.glaciercapitalfund.com/ website])

* [[GLG Partners]] ([http://www.glgpartners.com/ website])

* [[Goldman Sachs]] Asset Management

* [[Guidance Capital]] ([http://www.guidancecapital.com/ website])

* [[Locust Capital]]

* [[Marathon Asset Management]]

* [[Moore Capital Management]]

* [[Och-Ziff Capital Management]]

* [[Peloton Partners LLP]] ([http://www.pelotonpartners.com/ website])

* [[Pequot Capital Management]] ([https://www.pequotcap.com/ website])

* [[Pirate Capital LLC]]

* [[Prosperity Capital Management]] ([http://www.prosperitycapital.com/ website])

* [[Renaissance Technologies]]

* [[SAC Capital Advisors]]

* [[Shoreline Capital]] ([http://www.shoreline-capital.com/ website])

* [[Sierra Enterprises Group]] ([http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2004/11/07/BAGN19MGV11.DTL link])

* [[Soros Fund Management]]

* [[Superfund Group]]

* [[Tudor Investment Corporation]] ([http://www.tudorfunds.com/ website])

* [[Vision Investment Management]] ([http://www.visioninvestment.com/ website])

* [[MIR Investment Management]] ([http://www.mir.com.au/ website])

* [[Sanborn Kilcollin Partners, LLC]] ([http://www.sanbornkilcollin.com/ website])

===Top 30 funds of funds by size===

Ranked by December 2005 Assets Under Management

* [[UBS Global Asset Management]] (GAM) (London, UK and Stamford, CT) $45.0 billion ([http://www.gam.com])

* [[Man Investments]] (London, UK and Pfaffikon, Switzerland) $35.6 billion ([http://www.mangroupplc.com/about/about_overview.cfm])

* [[Oaktree Capital Management]] Los Angeles, CA $35.6 billion ([http://www.hoovers.com/oaktree-capital/--ID__104234--/free-co-factsheet.xhtml])

* [[Union Bancaire Privée]] (UBP) (Geneva, Switzerland) $20.8 billion ([http://www.ubp.ch/anglais/ubpproducts/index.html])

* [[HSBC Private Bank]] (Suisse) / HSBS Republic Investments (London, UK) $20.2 billion ([http://www.hsbcprivatebank.com/hsbc/rhp/our-services/investment-services/alternative-investments])

* [[Och-Ziff]] (New York, NY) $19.8 billion

* [[Permal Asset Management]] (New York, NY) $18.8 billion ([http://www.permal.com])

* [[Crédit Agricole Alternative Investment Products Group]] (Paris, France) $18.5 billion{{fact}}<!--prev given as $11.8 vandalism - curr figure vandalism? --> ([http://www.pictetfunds.com/home/welcome.html?lu=en])

* [[Société Générale]] (Paris, France) $15.9 billion ([http://www.sgam-ai.com/en/hedge_funds/1_hedge-funds.html])

* [[Quellos Capital Management]] (Seattle, WA) $15.0 billion ([www.quellos.com])

* [[Ivy Asset Management]] (Jericho, NY) $14.9 billion ([http://www.ivyasset.com])

* [[Grosvenor Capital Management]] (Chicago, IL) $14.7 billion ([http://www.grosvenorcapitalmanagement.com])

* [[Goldman Sachs Hedge Fund Strategies]] (Princeton, NJ) $14.2 billion ([http://www2.goldmansachs.com/careers/inside_goldman_sachs/business_snapshot/investment_management/asset_management/articles/asset_management_030926121019.html])

* [[Citadel Investment Group]] (Chicago, IL) $13.4 billion ([http://www.citadelgroup.com])

* [[Financial Risk Management]] (FRM) (London, UK) $ 13.3 billion ([http://www.frmhedge.com/frm/frm000.asp])

* [[Pictet & Cie.]] (Geneva, Switzerland) $13.0 billion ([http://ww.pictetfunds.com])

* [[Avenue Capital]] (New York, NY) $12.0 billion ([http://www.avenuecapital.com/])

* [[Notz Stucki & Cie.]] (Geneva, Switzerland) $10.7 billion ([http://www.notzstucki.com/])

* [[Davidson Kempner Capital Management]] (New York, NY) $10.1 billion ([http://www.dkpartners.com])

* [[Blackstone Alternative Asset Management]] (New York, NY) $9.3 billion ([http://www.blackstone.com/liquid_invst/index.html])

* [[Arden Asset Management]] (New York, NY) $9.2 billion ([http://www.ardenasset.com/])

* [[Pacific Alternative Asset Management Co.]] (PAAMCO) (Irvine, CA) $8.9 billion]] ([http://www.paamco.com/])

* [[J.P. Morgan Alternative Asset Management]] (New York, NY) $8.8 billion ([http://jpmorganfleming.chase.com/imweb/impub/products/hedgefunds/index.jsp])

* [[Mesirow Advanced Strategies]] (Chicago, IL) $8.2 billion ([http://www.mesirowfinancial.com/institutions/investmentmanagement/hedgefundoffunds/default.jsp])

* [[Tremont Capital Management]] (Rye, NY) $8.2 billion ([http://www.tremont.com])

* [[CSFB Alternative Capital]] (New York, NY) $7.9 billion ([http://www.csfb.com/investment_management/private_equity/index.shtml])

* [[AIG Global Investment Group]] (New York, NY) $6.7 billion ([http://www.aiggig.com/AIG/Hedge+Funds/Hedge+Funds/_About+Hedge.htm])

* [[Harris Alternatives]] (Chicago, IL) $6.7 billion ([https://www.harrisalternatives.com/default.asp])

* [[DB Absolute Return Strategies]] (New York, NY) $6.6 billion ([https://ars.db.com/arsportal/index.jsp])

* [[RBS Asset Management]] (London, UK) $6.5 billion ([http://www.rbs.com/])

* [[Lehman Brothers Alternative Investment Management]] (New York, NY) $6.2 billion ([http://www.lehman.com/im/am/lbam.htm])

* [[EIM]] (Nyon, Switzerland) $6.0 billion ([http://www.eimgroup.com/jahia/page2_en.html])

[http://www.InvestmentSeek.com InvestmentSeek.com] has a listing of most fund of funds managers with their links ([http://www.investmentseek.com/Investment_Managers/Hedge_Fund/fundoffunds.htm])

=== Managed Account Platforms===

* [[Lyxor]] ([http://public.lyxor.com/en/ga/lyxor.php?page=2/ website])

* [[Guggenheim]] ([http://www.guggenheimpartners.com/ website])

* [[MSS]] ([http://www.msscapital.com/ website])

* [[CASAM Group Managed Account Platform]] ([http://www.ca-sam.com/ website])

* [[Protege Financial Portfolio Builder]] ([http://www.protegesoft.com/ website])

=== Hedge fund strategies ===

*[[Global macro]]

*[[Arbitrage]]

**[[Convertible arbitrage]]

**[[Fixed income arbitrage]]

**[[Risk arbitrage]]

**[[Statistical arbitrage]] ('StatArb')

*Equity

**[[Equity market neutral]]

**[[Long / short equity]]

*Event driven (finance)

**[[Distressed securities]]

**[[Regulation D]]

*Other

**[[Emerging markets]]

=== Terminology ===

*[[Derivatives market]]

*[[Investment fund]]

*[[Venture capital]]

<!-- standard section headings begin here: References, Further Readling, External Links, Infobox, Categories; see WP:MOS -->

==References==

<references/>

4. [http://www.nytimes.com/2006/09/20/business/20hedge.html?_r=1&th&emc=th&oref=slogin Hedge Fund Amaranth wiped out by unhedged gas position losing $5+ billion]

5. [http://www.nytimes.com/2006/09/30/business/30hedge.html?th&emc=th "Hedge" Fund Amaranth to Close After loss of $6.5 of 9 billion on Unhedged Gas Bet]

==Further reading==

*{{cite book

| last = Lhabitant

| first = François-Serge

| authorlink = François-Serge Lhabitant

| year = 2002

| title = Hedge Funds: Myths and Limits

| url = http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470844779.html

| publisher = John Wiley & Sons

| id = ISBN 0-470-84477-9

}}

*{{cite book

| last = Lhabitant

| first = François-Serge

| authorlink = François-Serge Lhabitant

| year = 2004

| title = Hedge Funds: Quantitative Insights

| url = http://www.wiley.com/WileyCDA/WileyTitle/productCd-047085667X.html

| publisher = John Wiley & Sons

| id = ISBN 0-470-85667-X

}}

*{{cite book

| last = Lhabitant

| first = François-Serge

| authorlink = François-Serge Lhabitant

| year = 2004

| title = Handbook of hedge Funds

| url = http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470026634.html

| publisher = John Wiley & Sons

| id = ISBN 0-470-02663-4

}}

* Ineichen, Alexander M., ''Absolute Returns - Risk and Opportunities of Hedge Fund Investing'', New York: John Wiley & Sons, 2003. ISBN 0-471-25120-8

* Ineichen, Alexander M., ''Asymmetric Returns - The Future of Active Asset Management'', New York: John Wiley & Sons, 2006, forthcoming. ISBN 0-470-04266-4

* [[Gary Weiss|Weiss, Gary]], ''Wall Street Versus America: The Rampant Greed and Dishonesty That Imperil Your Investments'', New York: Portfolio, 2006. Argues that hedge funds tend to underperform market indexes and are excessively hyped by the media. ISBN 1-59184-094-5

* [http://www.nypost.com/business/hedge_funds_flameout_may_scuttle_abn_deal_business_zachery_kouwe.htm Hedge Fund Flameout]

*[http://www.finalternatives.com Hedge Fund News Site]

*{{cite book

| last = Gregoriou

| first = Greg

| authorlink = Greg N. Gregoriou

| year = 2006

| title = Funds of Hedge Funds

| url = http://books.elsevier.com/finance/?isbn=0750679840

| publisher = Butterworth-Heineman, an imprint of Elsevier

| id = ISBN 0-7506-7984-0

}}

*{{cite book

| last = Nelken

| first = Izzy

| authorlink = Izzy Nelken

| year = 2005

| title = Hedge Fund Investment Management

| url = http://books.elsevier.com/finance/?isbn=0750660074

| publisher = Butterworth-Heineman, an imprint of Elsevier

| id = ISBN 0-7506-6007-4

}}

*{{cite book| last=Kessler| first=Andy| year=2004| title= Running Money : Hedge Fund Honchos, Monster Markets and My Hunt for the Big Score| url=http://www.andykessler.com/about.html| publisher=Collins| id=ISBN 0-06-074064-7}}

*{{cite book| last=Drobny| first=Steven| year=2006| title= Inside the House of Money: Top Hedge Fund Traders on Profiting in the Global Markets| url=http://www.insidethehouseofmoney.com| publisher=Wiley| id=ISBN 0-471-79447-3}}

*[http://about.reuters.com/home/hedgefundspoll/ Reuter's quarterly survey on Fund of Hedge Fund managers' outlook for the main hedge fund strategies.]

==External links==

<!-- Wikipedia is not a link farm. Before adding a link, read [[Wikipedia:External links]] to see if it complies]] -->

*[http://www.library.hbs.edu/guides/hedgefunds/ Harvard Business School's Baker Library Guide to Hedge Funds]

*[http://www.seclaw.com/centers/hedgefunds.shtml SECLaw.com's Hedge Fund Information Center]

*[http://mutualfunds.about.com/cs/hedgefunds/l/blhedgefunds.htm Hedge Funds vs. Mutual Funds]

*[http://www.guardian.co.uk/weekend/story/0,3605,1575639,00.html ''The long and short''] - ''[[The Guardian]]'', [[September 24]] [[2005]] - This article explains hedge funds in layman's terms, why they are of interest to the general reader and contains interviews with fund managers.

*[http://www.finalternatives.com Hedge Fund News Site]

*[http://www.uiowa.edu/ifdebook/faq/Hedge.shtml What is a Hedge Fund?] University of Iowa Center for International Finance and Development

*[http://www.e-ii.com/images/covers/Institutional%20Investors%202004%20Research%20and%20Rankings%20Yearbook/2004%20Rankings.pdf Institutional Investors 2004 Ranking]

*[http://www.cfapubs.org/doi/pdf/10.2469/faj.v61.n6.2775 Hedge Funds: Risk and Return], study by Prof. Burton G. Malkiel critical of published hedge fund performance numbers

*http://www.hdmgmt.co.uk/gam.html Case Study of ISO 9001 investment process project at a significant hedge fund

*http://www.cisdm.org Center for International Securities and Derivatives Markets at the University of Massachusetts is a research center specializing in hedge fund research

*[http://moneyscience.org/home/tiki-read_article.php?articleId=1 How to Set Up Your Own Hedge Fund] and [http://moneyscience.org/home/tiki-read_article.php?articleId=7 Due Diligence, Disclosure and Fund Managers] - by Hannah Terhune, JD LLM (Taxation, New York University)

===Trade associations===

*[http://www.aima.org/ Alternative Investment Management Association (AIMA)]

*[http://www.thehfa.org/Aboutus.cfm the Hedge Fund Association (HFA)]

*[http://www.mfainfo.org/ Managed Funds Association (MFA)]

===Indices===

*[http://www.ftse.com/hedge?fuse=indices FTSE Hedge Indices]

*[http://www.djhedgefundindexes.com/ DOW Jones Hedge Fund Indexes]

*[http://www.edhec-risk.com/indexes/pure_style EDHEC Alternative Indexes]

*[http://www.hedgefundresearch.com/index.php?fuse=indices HFRI Monthly Performance Indices]

*[https://www.hedgefundresearch.com/hfrx_reg/index.php?fuse=login HFRX Indices]

*[http://www.hedgefund.net/HFNRealtime/bench_index.aspx HFN Real Time Averages]

*[http://www.hedgefund-index.com Hedge Fund Consistency Index]

===Hedge fund research===

*[http://www.finalternatives.com FINalternatives.com]

*[http://icf.som.yale.edu/research/hedgefund.shtml Hedge Fund Research Initiative] of the International Center for Finance at the [[Yale School of Management]]

*[http://www.edhec-risk.com Risk and Asset Management Center] of the [[EDHEC Business School]]

*[http://www.finalternatives.com Hedge Fund News Site]

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