The Money Tree Magazine 1st Issue | Page 47

Contributed by the new investor www.hedgefund-sa.co.za A Hedge Fund is a private investment vehicle that markets to only a few select institutions and or high net worth individuals, for which it then charges a performance fee and an administrative fee, traditionally 20% and 2% respectively, to leverage its trade ideas. Hedge Funds may make use of short selling, leverage and derivatives to assist in developing an alternative investment strategy, to generate absolute returns that should in essence be uncorrelated to the markets.[1] What are Hedge Funds? Hedge Funds are pools of private capital generally structu ɕ