How do hedge funds get new investors if they do not disclose their secret trading strategies to them?

If I had 100 million dollars to put in a hedge fund, I would like to know exactly how they trade. How do hedge funds get new investors if their trading strategies are secret?

That's like saying "Hey, give me millions and I'm not going to tell you what I'm going to do with it. If I lose it, the loss is 100% on you. Sound good? Trust me."

3 Comments
 

A: If you were rich enough to invest 100MM in a hedge fund, you would probably be worth billions (to the point where taking a massive loss in the 100MM is of little consequence, as hedge fund risk is large), or play a role in the hedge fund itself.

Most hedge funds post returns and specific contracts that detail how long you can't liquidate for. Some hedge funds vaguely describe their strategy, but its nothing you would learn anything significant from.

 

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