Hedge Fund Misconceptions
Hedge funds are often perceived as unregulated, risky and excessively-leveraged investment vehicles that lack transparency.
Let’s examine some of the most common misunderstandings:
Misconceptions
- They are unregulated
- They are very risky
- They charge excessive fees
- They have long ‘lock-up’ periods
- They lack transparency
Reality
- Established providers are regulated at the manager level
- Can provide superior diversification/downside limitation
- Performance fees only levied when ‘earned’
- Range of liquidity profiles available according to strategy
- Disclosure is improving but data interpretation is complex