The hedge fund industry is expected to grow strongly in the next few years as a result of regulatory changes, increased awareness of the industry, nervous equity markets and the current low interest rate environment.
The relatively small size of the hedge fund industry (compared to the traditional savings and investment industry) is an indication of the enormous potential for the hedge fund industry to expand.
Important considerations when investing in hedge funds:
- Philosophy, Process & People – You should invest money only with people who you trust, and if you are comfortable with the manager’s philosophy and investment process.
- Only invest via limited liability structures to limit the risk to the amount invested.
- Track-records matter – stick to those hedge fund managers with at least a three year track-record that exhibits above-average investment skill.
- Ensure that the incentives of the manager and the investor are aligned by examining the manager’s method of remuneration.
For more information on 36ONE’s funds Email your questions to info@investonline.co.za.