A finance professional with over 20 years of experience, R. Scott Bushley has helped multiple companies manage their daily expenses and submit related legal documentation. Scott Bushley's functional experience includes managing compliance, operations, finance, all earned in the securities and asset management industries.
A hedge fund is a service open to wealthy clients, where a group of investors pays a fund manager to invest in a variety of assets to preserve capital while generating gains. The assets vary and may include stocks and bonds, currency, commodities, stocks from financially-struggling companies, real estate, private companies and more – collectively called alternative investments due to relative lack of liquidity. These assets may not be tied to institutions like the stock market and the market indices that track the value of companies. Hedge fund managers aim to maximize positive gain using nontraditional methods, like borrowing money for investing purposes.
Hedge funds only assist wealthy clients who qualify as “Accredited Investors”, defined by the Securities and Exchange Commission (SEC) as individuals with an annual income of at least $200,000 over the prior two years, or $300,000 if they are married, or those with a net worth of at least $1 million, excluding the value of their residence. This is because hedge funds carry higher levels of risk than traditional investing methods, even after utilizing strategies to minimize losses, like investing in stocks that perform well in a boom or bust economy exclusively. Hedge fund managers charge multiple types of fees to clients, mainly a 1.5 to 2 percent management fee, calculated using the account’s net asset value, and a 15 to 20 percent performance allocation, computed using the profits generated.
A hedge fund is a service open to wealthy clients, where a group of investors pays a fund manager to invest in a variety of assets to preserve capital while generating gains. The assets vary and may include stocks and bonds, currency, commodities, stocks from financially-struggling companies, real estate, private companies and more – collectively called alternative investments due to relative lack of liquidity. These assets may not be tied to institutions like the stock market and the market indices that track the value of companies. Hedge fund managers aim to maximize positive gain using nontraditional methods, like borrowing money for investing purposes.
Hedge funds only assist wealthy clients who qualify as “Accredited Investors”, defined by the Securities and Exchange Commission (SEC) as individuals with an annual income of at least $200,000 over the prior two years, or $300,000 if they are married, or those with a net worth of at least $1 million, excluding the value of their residence. This is because hedge funds carry higher levels of risk than traditional investing methods, even after utilizing strategies to minimize losses, like investing in stocks that perform well in a boom or bust economy exclusively. Hedge fund managers charge multiple types of fees to clients, mainly a 1.5 to 2 percent management fee, calculated using the account’s net asset value, and a 15 to 20 percent performance allocation, computed using the profits generated.
