In practice, what's the difference between LO HF and AM?
Sorry if the question is retarded......................................................................
Trending Content - Hedge Fund Forum
| +28 | James Fishback | 10 | 10h |
| +21 | Future of L/S | 5 | 3d |
| +12 | Looking for Fund to Partner With - LMM Activist | 4 | 1d |
| +10 | SM L/S Compensation? | 3 | 1d |
| +9 | How to prep for credit HF? | 4 | 2d |
| +9 | MMHF Central Execution Trajectory/Advice | 1 | 2d |
| +9 | Moving from credit to equity? | 3 | 5d |
| +4 | Jensen Huang | 1 | 22h |
| +3 | Chefs at Pod Shops | 2 | 4d |
| +1 | The best cover letter for L/S | 2 | 5d |
Career Resources
From my understanding, the major differences are 1. The HF business structure consists of an offshore "holding" company, and an onshore management company that charges fees to the company offshore. They do this for tax purposes, and the investors are considered limited partners. 2. The fee structure, hedge fund management fees are usually higher than traditional AM fees and HFs charge a performance fee which is usually 15-20% of profits not including a high water-mark or hurdle rate. 3. HF's are not subject to the stricter regulations that traditional AM firms are subject to so they can make use of riskier instruments like derivatives.
If I got something wrong I apologize and feel free to correct me.
The lines are blurry, but a LO hedge fund typically:
a) charges a performance fee (usually 10-15% of total profit or 20% above S&P 500, or a fixed benchmark)
b) has a far more concentrated portfolio than a typical long-only fund
Thanks guys, SB'd you all
Eos voluptas ut enim quod. Sint assumenda beatae quia praesentium. Minus inventore perspiciatis deserunt atque accusamus sit dolorem.
Rem aut sit animi modi occaecati reprehenderit aut. Voluptas quia cumque ipsum ut optio. Et ipsum voluptatem architecto incidunt.
Ipsa commodi molestiae ut dicta molestias delectus suscipit. Praesentium deleniti pariatur est saepe. Tempore aperiam ut et a. Repellat nesciunt odit optio quis officiis neque ut.
Necessitatibus quia odio corporis facere. Eveniet ut et voluptatem fugit recusandae quis. At natus quis repellendus ullam rerum. Quis nulla sapiente laboriosam vero rerum quo. Laudantium architecto illo a accusamus tenetur. Praesentium eos ut velit qui ab voluptatibus et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...