Master Feeder Hedge Funds

Name

University

Course

Tutor

Date

Master Feeder Hedge Funds

McCrary (2008 , pg . 1 ) defines a hedge fund as a loosely regulated investment company that charges incentive fees and usually seeks to generate returns that are not highly correlated to returns on stocks and bonds ' Alfred Winslow Jones established the fist hedge funds in 1949 He structured the system to allow private investors to participate and major investments were common stocks . Since then hedge funds have grown and different categories have been established (McCrary , pg . 1 . As investors

seek investing in the global capital markets , the master-feeder fund structure has been introduced to facilitate the process and provide investors with enough tools for investment in a diversified environment . The paper explains hedge funds systems and provides different investment opportunities in the market . Analysis of master-feeder fund structure has been done at depth while providing both advantages and disadvantages

Hedge funds

Hedge funds are regulated by the federal laws to avoid misuse by interested parties . There is a lower level of regulation for hedge funds compared to mutual funds . Regulatory bodies in the United States have been debating about increasing regulations on hedge funds . Hedge funds are required to disclose small amount of information about their operations compared to mutual funds . Limited liability is a common feature of hedge funds as such investors cannot cover liabilities beyond the starting capital they provide . Investors are protected from liability in case an organization fails to perform better . Similarly hedge funds provide security to investors...