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Politics : Stockman Scott's Political Debate Porch

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To: Jim Willie CB who wrote (66833)11/22/2004 12:14:44 PM
From: stockman_scott  Read Replies (1) of 89467
 
Traditional hedge funds limited to a select few

chicagotribune.com

Restricted by law to fewer than 100 investors, hedge funds often demand that clients pony up $1 million or more to get in the door.

Hedge fund general partners -- the managers -- often invest their own money in the funds as well. Managers are typically paid 1 or 2 percent of clients' invested assets per year, plus about 20 percent of the fund's profits.

The funds are designed to deliver results under a variety of market conditions and typically specialize in high-risk stock trading and short-term speculation on bonds, currencies and derivatives. (Derivatives, securities that derive their value from another physical asset, include stock options and futures.)

Hedge fund companies sometimes revolve around a single investment strategy such as "fixed-income arbitrage," or taking advantage of price and yield disparities in the bond markets.

U.S. hedge funds are exempt from Securities and Exchange Commission reporting requirements, as well as from regulatory restrictions concerning leverage or trading strategies.

They cannot advertise or market themselves to the public, only to well-to-do, "qualified" investors.

-- Peter Healy

Copyright © 2004, The Greenwich Time
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