Basic understanding of hedge funds, with tom brough, a financial advisor

Basic Understanding of Hedge Funds, with Tom Brough, a Financial Advisor Tom Brough, a Financial Advisor, is experienced with managing numerous hedge funds. He runs a portfolio of hedge funds as the Manager of the Hedge Access Group. The Hedge Access Group is headquartered in the city of Chicago, Illinois.

Hedge Funds are investment vehicles that are also business structures which pool capital from numerous investors and invest in securities and other instruments.

Hedge funds are managed by professional management firms, and are usually structured to be a limited liability company, limited partnership, or another similar vehicle. Generally, hedge funds are different from mutual funds in that their application of leverage is not capped by regulators or from private equity funds since most all hedge funds are concerned with investments in relatively liquid assets.

There is a diverse array of markets that hedge funds invest in using a diverse range of financial instruments and investment styles. Not all hedge funds hedge, like their namesake, 'hedging techniques' would suggest. The general public can not purchase hedge funds, as they are only made available to specific sophisticated or accredited investors. Furthermore, they are generally designed to bypass licensing requirements that apply to investment companies, avoid regulatory oversight that is direct, and have the ability to operate with more flexibility than mutual funds or other types of investment funds.

Most often, hedge funds are open-ended and thereby allow for additions or withdraws by their investors, usually on a quarterly or monthly basis. Many hedge fund managers invest their own money in the fund or funds that they manage – this aligns their own interests with that of the other investors in the fund. Typically, a hedge fund pays the manager of the investment via an annual management fee, however there are a variety of ways in which hedge fund managers may be paid, according to Tom Brough, a Financial Advisor.

Hedge funds range greatly in size. Some hedge funds have many billions of dollars worth of assets under management. According to Tom Brough, a Financial Advisor, as of June 2013, the global hedge fund industry had an estimated size of $2.4 trillion.

Tom Brough, a Financial Advisor, says that the first hedge fund structure was created in 1949 by sociologist Alfred W. Jones, who is also credited with coining the phrase 'hedged fund'. There are many different strategies that hedge funds are classified within, including global macro, event-driven, relative value, and directional.