We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

How hedge funds are structured Essay

Essay Topic: ,

Sorry, but copying text is forbidden on this website!

Hedge funds are investment partnerships with the scope of investing in any kind of market securities including real estates, derivatives, currencies, commodities among many others. The funds play essential roles in decreasing the mispricing activities in the financial markets. They are considered significant in the provision of liquidity both during the calm and stressful periods. The funds add depth and scope in the capital markets and provide an important source of transferring and diversifying risks by taking risks that would have instead lingered in the balance sheets of numerous financial organizations.

We will write a custom essay on How hedge funds are structured specifically for you
for only $16.38 $13.90/page

Order now

Various brokerages have offered hedge fund among other instruments.

Firstly, the regional brokerage offers such instruments because of its potential higher return. Being a limited partnership, the hedge fund only has a little regulation, which means that different investment strategies such as financial leveraged or short positions can be used throughout their investment. They will seek to provide the exploited investment opportunities through different investment vehicles. Involved strategies include ultimate analysis of the publicly traded companies with an emphasis on the small and medium enterprises that are also involved in the conduct of business activities. The modern hedge fund structure includes an incentive-based fee based on a certain percentage of profits and a fee of assets under management. With an excellent performance of a hedge fund manager, the firm can maximize the returns and minimize market risk and thus earn high commissions in both up and down market by picking a good stock.

From the history record, the energy prices usually have a high correlation with inflation. In the periods of rising inflation, the energy funds are doing better in the market. Its past performance was unusual in such a volatile and cyclical industry. Thus, it provides investors with a good diversification tool. This is also why such brokerages would like to offer energy fund. For the investors, the hedge funds bring a higher return for them. For the firm, their competitiveness is increased. The hedge funds are vital in maintaining competitive edges in capital markets. Brokerages provide essential research details that attract investors as well as financial capital that fasten economic growth.

The dynamic hedge fund reports are provided to show the numbers, size, and locations of the funds. They show experiences of growth over periods of time which is measured either by the number of issued funds or rather the assets that are under the management. In addition to the above, they show the accountability and transparency by offering information associated with the financial health of the types of companies in the target for investment. Regional brokerages offer such instruments to enable investor protection from risks that are associated with hedge funds. It offers a guidelines to investors. The reports show the overvalued and undervalued equity securities. They reveal the funds with highly expected returns which one can invest in. The activist hedge fund intends to increase the benefit of the shareholder through the company ownership and the demands that are made in favor of improving the management and the business strategies.

How to cite this page

Choose cite format:

How hedge funds are structured. (2018, Apr 05). Retrieved from https://studymoose.com/how-hedge-funds-are-structured-essay

We will write a custom sample essay onHow hedge funds are structuredspecifically for you

for only $16.38 $13.90/page
Order now

Our customer support team is available Monday-Friday 9am-5pm EST. If you contact us after hours, we'll get back to you in 24 hours or less.

By clicking "Send Message", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
No results found for “ image
Try Our service
online

Hi, I am Sara from Studymoose

Hi there, would you like to get such a paper? How about receiving a customized one? Click to learn more https://goo.gl/CYf83b

online

Hi, I am Sara from Studymoose

Hi there, would you like to get such a paper? How about receiving a customized one? Click to learn more https://goo.gl/CYf83b

image

Your Answer is very helpful for Us
Thank you a lot!