HF vs AM vs TR

HF - raises money exclusively from accredited investors or institutions to typically invest in public markets, usually a GP/LP structure with mgmt fees and performance fees, usually makes use of leverage from prime brokers or other counterparts, usually makes use of derivatives, usually makes use of shorts, focuses more on absolute return strategies

AM - raising money from retail (through distribution channels), accredited and institutional investors, usually structured as investment corps (UCITs, Mutual Funds, etc), usually charge one all-inclusive “on-going fund charge” for both management and trading expenses, usually deploys real money not leverage, very little use of derivatives, focus is on long-term buy-and-hold, usually relative return or income strategies, usually focuses on “style” rather than specific absolute return strategies

TR - basically the equivalent of a wholesaler for market participants. they buy at slight discounts to market price and sell at slight premiums to market price - making money on the spread. they also hold inventory in anticipation of market demands and hedge out this inventory to reduce negative risk exposures

PE - mostly majority investments into private companies using a mix of debt and equity, strategy is to sell the stake for more than they bought it through either financial engineering,  platform plays or operational improvement, setup as a GP/LP structure with the same management fee + performance fees as HFs but more restricted due to being illiquid

VC - minority investments into high-growth potential category changing businesses with the view of achieving an exit (acquisition or IPO) worth multiple times their initial investment, similar structure to PE / HF firms (GP/LP structure, mgmt fee + perf fee), also illiquid as they deal with private companies