Years ago, the New York Times famously referred to financial instruments used by hedge funds as “exotic and risky.” Today, hedge funds have truly emerged as a legitimate and increasingly stableinvestment vehicle.
The hedge fund industry has exploded in size with global hedge fund assets valued at more than $2 trillion this year, according to a survey released by publisher HedgeFund Intelligence. Even with itsenormous growth and influence, very few investors truly understand how hedge funds work and how they achieve “alpha” or returns that are independent of market movements.
According to a new Spectrem Perspective report released earlier this month, just 18 percent of affluent investors, defined as having more than $500,000 in investable assets, say they understand hedgefunds. This is an industry that every business major needs to understand considering their massive impact in capital markets.
