A hedge fund is a private investment partnership. There is a fund manager (general partner) and the investors in the hedge fund are called limited partners. The limited partners contribute the money and the general partner manages it according to the fund’s strategy.
A hedge fund is not regulated by the SEC as much as a mutual fund because it is not open to the general public. Hedge funds are only open to accredited or qualified investors and those investors have to meet certain net worth requirements to invest in them.<< Back to Glossary Index