Hedge Funds
Hedge funds have enjoyed a significant surge in popularity over the past several years, especially for experienced investors with significant investible assets. Recently, some hedge fund managers have lowered their minimum investment amounts significantly, as a means of encouraging more investors to have access to these types of funds. Millennium Trust administers and custodies hedge funds in self-directed IRAs as well as other account types.
A hedge fund is a private, largely unregulated pool of capital whose managers can buy or sell any assets. The funds speculate on falling as well as rising assets and participate substantially in profits from money invested. A hedge fund generally charges both a performance fee and a management fee and are typically open only to qualified investors.
As with many alternative investments, these types of investments are not for everyone. Hedge funds normally are open to institutional or otherwise accredited investors. Hedge funds are lightly regulated private investment funds often characterized by unconventional investment strategies. They often make use of legal structures, sometimes offshore, to mitigate the effects of local regulation and tax regimes. Hedge funds also have the ability to short, or sell, instruments they believe will fall in price. In this way, hedge funds are able to create more complex investment structures which can profit in times of market volatility, or even in a falling market.
Hedge funds generally are organized as limited partnerships, and may be referred to as limited partnerships.
Millennium Trust does not recommend any particular investment or asset category. Investors are urged to speak with a tax or investment advisor before investing.