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Investing in Hedge Funds

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Investing in Hedge Funds

Strategies for the New Marketplace

Bloomberg Press,

15 min read
10 take-aways
Audio & text

What's inside?

Hedge fund managers often invest a lot of their own money, but there are a few things you need to know before you ask them to invest a lot of yours.

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Editorial Rating



  • For Experts


While this book is meant to serve as an introduction to the complex world of hedge funds, hedge fund managers and hedge fund investors (in short, the hedge fund dynamic), it is decidedly not of the For Dummies family that currently dominates the do-it-yourself investment section of the book store. This is a highly sophisticated look at what has become one of the most exciting sectors of the investment world. If you have some knowledge of finance and its terminology, and you want to know what a hedge fund is and what kinds of strategies most hedge fund managers use, getAbstract recommends this highly specific book to you. On the other hand, if you just want to gain some insights into the investment world, you’d be better off picking up the financial section of the newspaper. Hedge funds are serious and so is Joseph G. Nicholas’ book. (Editor’s note: Despite the 1999 copyright date, the book makes no reference to Long-Term Capital Management, the hedge fund that collapsed in 1998, nearly bringing about a global financial crisis.)


The Big Guns of Finance

John Meriwether, Jeff Vinik and Jon Jacobson are some of the top minds in finance - but that’s not all they have in common. They all left great jobs to get involved with hedge funds. Meriwether was the vice chairman of Salomon Inc. Vinik traded Magellan. Jacobson, meanwhile, handled part of Harvard’s endowment. Leaving these institutions, you can bet, was no small step for these men; you can also bet, however, that they knew exactly what they were doing.

Hedge funds allow you to exercise unprecedented control over your investments. They also allow you to use many more financial tools than you can in traditional markets. But if these slightly vague assertions wouldn’t convince you to follow in Meriwether’s, Vinik’s and Jacobson’s footsteps, then maybe some numbers will. In the past 10 years, the hedge fund industry’s assets reached $400 billion. During the same period of time, the number of hedge funds rocketed from 200 to more than 3,000.

What Is a Hedge Fund, Anyway?

A hedge fund is not an investment approach - it’s an investment structure. It allows you to manage a private unregistered investment pool through a fund manager who...

About the Author

Joseph G. Nicholas is chairman of Hedge Fund Research, L.L.C., a research and investment firm that specializes in alternative investments.

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