Participants in hedge funds, Financial Management

Assignment Help:

Participants in Hedge Funds:

The Sponsor and the Investors

Sponsors are promoters and generally, they hold a profit share on percentage for the capital invested in the Fund. In limited partnerships, they are the general partners and usually receive an allocation of income on the Fund based on performance. General partners also act as intermediaries for investors in Hedge Fund industry. They invest the Fund collected from investors based upon investment strategies to maximize returns.

Generally, investors in Hedge Fund industry are persons or institutions willing to take high risk for high returns. The largest category of investors in Hedge Funds comprises retail and high networth individuals. According to estimates, they contribute about 75 percent of the total assets managed in the Hedge Fund universe. Others who are increasing their investment activities in Hedge Funds are pension funds, endowment funds, fund of Hedge Funds, etc. According to the Securities Exchange Commission (SEC), US guidelines, the minimum level of networth for investment in the Hedge Funds for investors is $1 million. This limit is necessary to qualify them as ‘accredited investor', to participate in Hedge Funds. The limit for investment in Hedge funds for corporations, trusts, and other institutions is $5 million in networth and total assets of $25 million. Percentage of institutional and investors allocating capital to hedge funds for the years 2003 and 2005

 


Related Discussions:- Participants in hedge funds

Determine interest coverage ratio, Q. Determine Interest coverage ratio? ...

Q. Determine Interest coverage ratio? Current interest coverage ratio = 7000/500 = 14 times Increased profit before interest and tax = 7000 × 1.12 = $7.84m Increased inte

Define which is lower cost of debt or cost of equity, Which is lower for a ...

Which is lower for a given company:  the cost of debt or the cost of equity?  Explain: Ignore taxes in your answer . The cost of debt is all the time less as compared to the cost

Enumerate the securities and investment analysis, Enumerate the Securities ...

Enumerate the Securities and Investment Analysis Purchase of bonds, stocks and othersecurities involve analysis and techniques which are highly specialized. An investorshoul

MM., What are the assumptions of MM(Modigliani Miller) approach?

What are the assumptions of MM(Modigliani Miller) approach?

Arbitrage-free valuation approach, The main drawback of the tradition...

The main drawback of the tradition approach of valuation is that it discounts every cash flow using the same discount rate. For example, let us take 5-year (7.00 per ce

Explain the fixed and floating rates, Question 1 Globalization is a pro...

Question 1 Globalization is a process of international integration that arises due to increasing human connectivity as well as the interchange of products, ideas and other aspe

Why depreciation play in estimating incremental cash flows, What role does ...

What role does depreciation play in estimating incremental cash flows? Depreciation expense is a tax deductible expense and thus affects cash flow through its effect on taxes.

Policy conflicts in debt and monetary management, Policy Conflicts in Debt ...

Policy Conflicts in Debt and Monetary Management: Co-ordination of operations is important so as to avoid differences in the policies of cash and debt management of the governm

financial crisis, Hedge funds are short two types of funding options. Desc...

Hedge funds are short two types of funding options. Describe in detail what these options are.   Describe why these options become more valuable during a financial crisis.   During

Common-size statement value, A firm has sales of $6,500, net income of $500...

A firm has sales of $6,500, net income of $500, total assets of $12,000, and total equity of $700. Interest expense is $1000. What will be the common-size statement value of the in

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd