Hedge funds Essay Example | Topics and Well Written Essays - 1250 words

duck memory boards - Essay ExampleThe terminal douse fund involves any pooled investment medium that is (1) organized in private, (2) directed by experienced and professional investment managers, and (3) not accessible to the public. Hedge cash are supported by abundant personalities and institutional investors who are regarded as primary investors. Other investors include (1) endowment funds, (2) pension plans, (3) funds of funds, and (4) sell investors. (Boyle, 2007) Other bodies characterized as hedge funds are systematic and limited partnerships and liability companies or some commonly reside outside the United States. (Presidents on workings Group on Financial Markets, 1999)Hedge fund originated in 1949. By 1968, 140 hedge funds were operating as reported by the U.S. Securities and Exchange Commission. Within the last 20 years, hedge fund industry bloomed and become common in the U.S. grocery. According to Phelim Boyle (2007), in the year 1990, a entireness number of 610 funds are controlling $39 billion worth of assets. By 2000, there were 3,873 funds directing $490 billion assets. The estimated size of the hedge fund industry in mid-1998 was in the range of 2,500 and 3,500 hedge funds controlling between $200 and $ three hundred billion worth of capital, totaling more or less $800 up to $1 trillion in total assets. As compared with other U.S. financial market sectors, hedge funds are relatively small. ... (Presidents on Working Group on Financial Markets, 1999)The Marko Maslakovic (2008) reports that despite the existence of market destabilizations, the hedge fund industry go on to grow in management assets and the number and type of institutions investing in hedge funds. For the assets under management, the hedge fund for this category amounted to over $2,250 billion in the end of 2007. Figure 1 generates the trend of globular hedge funds in relation to their assets under management. The number of hedge funds reached over 11,000 in 2007 or 12 portion increase from the previous year (2006). The presence of the increasing acknowledgement crisis and increase market volatility did not hinder hedge funds assets from growing by 30 percent in 2007. Hedge funds did not incur any significant influence on the credit crisis because only 5 percent of their assets were examined in mortgage-backed securities in September 2007. Boyle (2007) mentions six (6) reasons for the hedge funds outgrowth (1) technological innovations, (2) derivatives revolution, (3) specialization, (4) increase of market complexities such as catastrophe bonds and structured products, (5) recent poor market equity performance, and (6) low interest rates. Figure 1For the distribution of hedge funds in the world, reports of Maslakovic (2008) show that the United States is the major source of hedge fund investments with 67 percent of the total hedge funds assets in 2007. Europe and Asia are the next large sources with 22 percent and 7 percent shares respecti vely. in the altogether York City is the worlds leading city for hedge managers and it is followed by London. In New York, around 60 percent of hedge fund managers are stationed in this city.