Hedge funds are investment firms that use complex strategies and other forms of hedge fund management to generate returns for their investors. They are different from traditional investment funds that invest in stocks and bonds, and they are less regulated and much more opaque. This opaqueness is by design because many Hedge Funds are based offshore for tax and secrecy purposes.

A study by Yale and NYU Stern economists suggests that the average annual return on a ten-year hedge fund investment is 13.6%, while that for an indexed investment strategy can be as little as 0.25% per year or less. This is much higher than the flat 1 per cent charge that traditional financial advisers charge, which is 16.5 per cent. By contrast, Asset Secured Investments generate around a 10% return year on year with a greatly reduced risk profile, having

Hedge funds typically look not for the average person buying shares in an investment fund, but for a limited partnership that builds up a large amount of capital. Fund managers invest in funds before they launch them to build investment portfolios. When a fund manager performs exceptionally well and delivers excellent returns, the funds attract large institutional investors who can invest a significant amount of capital.