What is a hedge fund (or other private investment fund)?

A hedge fund is an investment vehicle where multiple investors pool their money for one organization to manage. Usually, the fund has a specific industry and investment strategy. Different funds have different goals - for example, one fund might trade cryptocurrency with algorithmic strategies. They are structured as Limited-Partnerships, where one general partner manages the money of the limited partners (investors). Hedge funds are actively managed, meaning the investment team closely monitors investments and can enter or exit positions at any time. Here is a good introduction to hedge funds.

What are the risks of investing in private funds?

Because private funds are not as regulated as other securities, they present much higher risk than traditional markets. The diligence process to invest in a private fund is usually longer and more complex than public markets. Some funds pursue high-risk strategies that run the risk losing the investment. However, with this higher risk comes greater rewards.

How do I know if the fund is trustworthy?

When considering private investments, look into the experience and skills of the fund manager. Other statistics like the age of the fund, Risk Adjusted Return (Sharpe Ratio), and clauses in offering documents can provide a better idea of an investment's risk. Decheque provides this information as well as vets every fund on our platform.

None of the information on this website is investment advice. The Decheque online platform is only available to accredited investors.