What are Hedge Funds | Hedge Fund Definition
Hedge Funds are privately managed investments for highly sophisticated and wealthy investors. Hedge funds employ a wide variety of strategies ranging from long-short funds, currencies, commodities, arbitrage strategies, leveraged bond investments and many others. Hedge funds pay investment professionals significant commissions and fees. By design, hedge funds are supposed to outperform in up and down market cycles. Investment professionals must conduct significant due diligence prior to recommending hedge funds to investors. Investment professionals must understand all pertinent risks and features and explain them to potential investors. An investment professional cannot simply hand an investor the offering memorandum and meets its industry mandated risk disclosure standards.
Hedge Fund Risks | Hedge Fund Losses
Although hedge fund investors are designed for only the wealthiest and most sophisticated clients, investment professionals are not insulated from liability. Investment professionals often reference past performance or downplay the likelihood that the hedge fund’s strategy will ultimately fail. Too often investors are told that the risk is “hedged” and that the strategies employed have less volatility than traditional stock or bond investments. Hedge funds generate higher returns through the use of leverage. Any representations regarding lower volatility, or that the fund has hedged risk are extremely misleading.
Legal Help for Victims of Hedge Fund Securities Fraud
If your investment professional has sold you a hedge fund promising high returns with low volatility and risk, you may have a claim for damages. The Investment Fraud and Financial Fraud Attorneys at Gilman Law LLP, a leading securities fraud law firm, are here to help you recover damages on your hedge funds fraud claim. For a FREE consultation and evaluation of your case, please complete our Free Consultation Form Online, or if you need to speak to a securities attorney right away CALL TOLL FREE (888) 252-0048 today.