Hedge Fund
Definition
A pooled investment vehicle that employs diverse strategies including leverage, short selling, derivatives, and alternative asset classes to generate returns for professional or qualified investors. Hedge funds are typically structured as alternative investment funds and regulated under AIFMD in the EU or as private funds in the US.
Regulatory Context
Hedge fund regulation has increased significantly since 2008, with AIFMD introducing EU-wide requirements for managers including authorisation, capital, reporting, and remuneration rules. The SEC requires registration under the Investment Advisers Act for managers above certain thresholds.