Question
Compare hedge fund vs private equity?
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12th Nov 2009 by Daniel Cross, ChFC
Hedge Funds are private investment companies that are structured as Limited Partnerships. The general partner is the Hedge Fund manager while the limited partners would be investors. In order to invest in a Hedge Fund, the potential partner must qualify as a high net worth individual - someone that has earned over $200,000 over the past 2 years with a reasonable assumption that it will continue or a net worth of at least $750,000.00. The manager pools together everyone's money and trades various products ranging from stocks to bonds to derivatives. It is currently a lightly regulated industry that allows the Hedge Fund manager a lot of freedom but comes with the price of not being allowed to advertise or market the Fund to anyone other than the aforementioned qualified investors.
Private Equity companies invest primarily in companies that are not publicly traded. They profit based on a
companies underlying company and are known for restructuring and streamlining them for maximum efficiency. They are open to any investors as they do not have the type of restrictions Hedge Funds have, although if they begin to trade stocks, they must reorganize as such.
Hedge Funds are private investment companies that are structured as Limited Partnerships. The general partner is the Hedge Fund manager while the limited partners would be investors. In order to invest in a Hedge Fund, the potential partner must qualify as a high net worth individual - someone that has earned over $200,000 over the past 2 years with a reasonable assumption that it will continue or a net worth of at least $750,000.00. The manager pools together everyone's money and trades various products ranging from stocks to bonds to derivatives. It is currently a lightly regulated industry that allows the Hedge Fund manager a lot of freedom but comes with the price of not being allowed to advertise or market the Fund to anyone other than the aforementioned qualified investors.
Private Equity companies invest primarily in companies that are not publicly traded. They profit based on a
companies underlying company and are known for restructuring and streamlining them for maximum efficiency. They are open to any investors as they do not have the type of restrictions Hedge Funds have, although if they begin to trade stocks, they must reorganize as such.
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9th Nov 2009 In Finance
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Subjects: hedge funds,
private equity,