Hedge funds - friend or foe?
Offshore focus: Guernsey - Kevin Boscher asks whether hedge funds are the villains among investments, to be considered by only the most speculative of investors
In recent years, hedge funds have become an increasingly prominent part of the lexicon of investing. The strategies and performance of hedge fund managers have gained wide attention, particularly last year when the collapse of Long Term Credit Management (LTCM) almost caused a global financial meltdown. Since that event, hedge funds have generally been portrayed by the media as extremely speculative, high-risk and mysterious investment vehicles. They have also been accused of practically sabotaging the world financial system. But are hedge funds the real villain and should they be ignored by all but the most speculative of investors?To begin with, let us first look at what a hedge fund is. The first hedge fund started trading in New York on 1 January, 1949 and was managed by Alfred Jones. The fund took both short and long positions in the same portfolio with the objective of increasing returns while simultaneously lowering risk by reducing the overall net exposure to the market.
This premium content is reserved for
Legal Week Subscribers.
A PREMIUM SUBSCRIPTION PROVIDES:
- Trusted insight, news and analysis from the UK and across the globe
- Connections to senior business lawyers within the leading law firms and legal departments
- Unique access to ALM's unrivalled, market-leading reporting in the US and Asia and cutting-edge research, including Legal Week's UK Top 50 and Global 100 rankings
- The Legal Week Daily News Alert, Editor's Highlights, and Breaking News digital newsletters and more, plus a choice of over 70 ALM newsletters
- Optimized access on all of your devices: desktop, tablet and mobile
- Complete access to the site's full archive of more than 56,000 articles
Already have an account? Sign In Now
For enterprise-wide or corporate enquiries, please contact Paul Reeves on Preeves@alm.com or call on +44 (0) 203 875 0651