What do HF analysts personally invest in?
Given you are not allowed to invest in the stock market, what do HF analysts / PMs invest their personal capital in? In PE, the compliance varies firm to firm, but at most firms you are allowed to trade. On the HF side, compliance is much more strict and you are not allowed to invest in the market (ETFs are an exception). As such, do most HF analysts / PMs invest in real estate, startups, or just buy ETFs?
Buy your house/Flat, the fund itself, ETFs, alternatives
Thanks - do most traditional L/S funds allow you to invest back in the fund?
It depends on the type of fund and how many investors it has. Hedge Funds can only be invested in by accredited investors (granted, most HF employees are probably accredited) and there is a maximum number of investors they can have (depending where they are based and on the net worth of their investors).
One bit of investment wisdom is to not put all your eggs in one basket, if you work at a firm and get all your pay/bonuses from there it’s a poor idea to invest a notable amount of your portfolio in that firm. If the firm goes under or starts hurting, not only can you lose your job but your investments will collapse at the same time (when you need them most).
Interested to hear what type of personal investments sell side traders are running
I invest in early stage deals through a local angel investment group. It aligns a bit with my HF strategy which is bottoms-up and highly concentrated (7 positions). Both the HF and angel strategy involve spending most of my time understanding the business model in detail, and I've had multiple occasions where I see something on one side that helps the other.
Wait HF employees aren't allowed to invest in the stock market? Definitely was not the case for the fund I worked at. Can someone elaborate here?
Interesting... almost everyone I know that works at a HF is not allowed to trade
It varies from fund to fund. I'm allowed to trade but I need to get approval from compliance. I also need to report all of my personal holdings at the end of each quarter, if any. I can invest in mutual funds or ETFs with no disclosure requirements.
If you’re into any sort of collectibles (watches, art, coins, etc) that could be a place to allocate some small amounts of money. I’d only do this if you’re actually passionate about collecting as a hobby. Also don’t have huge expectations for appreciation.
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