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A hedge fund
is a private investment fund open to a limited range of investors that is
permitted by regulators to undertake a wider range of activities than
other investment funds and also pays a performance fee to its investment
manager. Each fund will have its own strategy which determines the type of
investments and the methods of investment it undertakes. Hedge funds as a
class invest in a broad range of investments extending over shares, debt,
commodities and so forth.
As the name
implies, hedge funds often seek to offset potential losses in the
principal markets they invest in by hedging their investments using a
variety of methods, most notably short selling. However, the term
"hedge fund" has come to be applied to many funds that do not
actually hedge their investments, and in particular to funds using short
selling and other "hedging" methods to increase rather than
reduce risk, with the expectation of increasing return.
Credience
helps hedge funds measure and estimate the Market Risk, Credit Risk and
Operational Risk of their portfolios. By use of advanced portfolio
optimization techniques and Credience software, Credience can optimally
manage any portfolio of assets and instruments.
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