Hedge funds are often perceived as unregulated, risky and excessively-leveraged investment vehicles that lack transparency.
Let’s examine some of the most common misunderstandings:
|They are unregulated||Established providers are regulated at the manager level|
|They are very risky||Can provide superior diversification/downside limitation|
|They charge excessive fees||Performance fees only levied when ‘earned’|
|They have long ‘lock-up’ periods||Range of liquidity profiles available according to strategy|
|They lack transparency||Disclosure is improving but data interpretation is complex|