May 19, 2016
Over its long history, the financial services industry significantly grew in complexity and sophistication. Players of all kinds constitute the large international ecosystem with strong cross-border ties. While one sort of players may see a rapid growth, others will experience historical, seasonal or a different type of decline. Hedge funds, in particular, seem to be attracting attention recently due to growing concerns over their operations and sustainability.
Hedge funds represent partnerships of accredited investors uniting their assets into a common pool to create a complex investment portfolio and generate extraordinary returns for partners. As explained by SEC, many hedge funds seek to profit in all kinds of markets by using leverage (borrowing to increase investment exposure as well as risk), short-selling and other speculative investment practices.
When we refer to hedge funds, the count always goes in billions – that’s how massive the business is. According to The Guardian, 25 best-paid hedge fund managers put $13 billion into their pockets in 2015, a sum that exceeds the GDP of many nations, as the source notices.
Although hedge funds are not subject to some of the regulations that are designed to protect investors, they are subject to the same prohibitions against fraud as are ...