Managed Funds Association launched HEDGEfundamentals.org – an educational website designed to answer the most common questions about the alternative investment industry.
The web site features a new video series narrated by Dr. Paul Schultz, the Clarke Professor of Finance at the University of Notre Dame and director of the university’s Center for the Study of Financial Regulation. Over the course of five short videos, Dr. Schultz walks viewers through industry fundamentals: what hedge funds are and who invests in them; how funds are organized and regulated; why investors use them; and investment techniques.
Infographics, white papers and additional educational materials will complement the new video content.
The videos below are available for viewing here.
- Chapter 1: What are Hedge Funds & Who Invests in Them?
This video explains the basic facts about hedge funds and who invests in them. Hedge fund investors must meet basic requirements defined by the Securities and Exchange Commission prior to investing. Investors generally fall into two categories, institutional investors like pension plans, endowments and large philanthropies or high net worth individuals. Nearly two-thirds of all industry investors are institutions, so many individuals who do not invest in hedge funds directly do so indirectly through their pension plans.
- Chapter 2: Organization of Hedge Funds
A hedge fund is an investment fund that pools capital from a limited number of investors and uses it to purchase a portfolio of assets. Most hedge funds are organized as limited partnerships. This video looks at how these partnerships are structured and the role each partner plays in the fund’s organization.
- Chapter 3: Regulation of Hedge Funds
This video breaks down the layers of state and federal regulations with which the industry complies. In addition to laws specifically focused on hedge fund activities, all fund managers are subject to federal laws prohibiting insider trading, market manipulation and fraud. Finally, while the industry is highly-regulated, there is no government backstop and no hedge fund received a Troubled Asset Relief Program bailout during the financial crisis.
- Chapter 4: Why Investors Use Hedge Funds & Industry Growth
The first hedge fund was started in 1949 by Alfred Winslow Jones, a sociologist and writer for Fortune Magazine. The industry grew rapidly in the 1990s and now manages approximately $3 trillion globally. This video examines how institutional investors began using hedge funds as tools to help diversify their portfolios, and how that fueled the industry’s growth.
- Chapter 5: Hedge Fund Investment Techniques
This video discusses different investment tools and techniques that are more common in the alternative industry than with more traditional investment funds. Short selling and the use of leverage are just two techniques commonly used by hedge funds that are explored in the video.