Monday, January 24, 2011

Wealthy benefit from Hedge Funds

WEALTHY 400

My friend Chip has brought up his concerns over how the wealthy 400 may have benefited from the financial real estate debt crisis; of which we are all still suffering financially from the lingering debacle. Many wealthy Americans have benefited from investing in Hedge Funds. Hedge Funds were first set up by Albert W. Jones in 1949. Hedge funds were originally used as a short sale vehicle and for combining leverage techniques for investors. See What is a Hedge Fund . Hedge funds are still largely unregulated, you can find an explanation of how Hedge Funds were to be regulated by the SEC but the SEC was over ruled by the courts; read about it in What is a Hedge Fund .

It may be that Wealthy 400 Americans have benefited greatly from investing in hedge funds, however it was average Americans who purchased real estate on a basis by which many could not afford it. To the extent that this problem was becoming predictable by American Wealthy investors, their investing vision was formulated before the obvious crisis had unfolded, this may say more about our Government's inability to react to our impending financial problems, then whether or not unfair advantages were provided to the Wealthy. It may be however, in general, that if the Wealthy were unable to Hedge against there investments so efficiently, then there may have been greater concern generated by the wealthy; creating perhaps significant vocalization of the problem to our Legislators; thereby initiating positive change prior to the crisis developing. Here are some of the Wealthy 400 who were involved with Hedge Funds.


Henry Swieca - Highbridge Fund
Jamie Dinan - York Capital
Stephen Mandel - Lone Pine Capital


CNBC reported recently that Hedge Funds may be the Next To Big To Fail problem in the financial markets. See how they describe the growing size of Hedge Funds; Next To Big To Fail .

If you are an investor it may be time to become more familiar with Hedge Funds and possibly get on board with an investment strategy. Remember it will take quite a bit of capital to get involved and invest in a Hedge Fund. According to Eurekahedge the following describes minimum investments required for Hedge Funds.

What is the minimum investment?
The minimum investment varies from fund to fund. Although some funds are charging as low as US$10,000 these are very much the exception and a common starting range would be between US$250,000-$500,000. Established funds can have much higher minimums; $10,000,000 or more, depending on the fund and manager. The fund manager can waive the minimum at his sole discretion but this is usually only undertaken to accommodate serious investors who stipulate an intent to allocated substantially more than the stated minimum, depending on how this initial allocation performs.
Good Luck, Stay Tuned For More about American Wealth









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