In the investment world, there are ‘traditional’ investment managers and ‘alternative’ investment managers. Both manage investment capital but they use different approaches to generate returns.
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Traditional investment managers
Traditional investment managers typically buy financial instruments such as stocks or bonds and hold them in the expectation that the price of these assets will rise. -
Alternative investment managers
Hedge fund managers use investment pools to implement various strategies and often invest in highly speculative investments because they have a small, qualified and sophisticated investor base.
Hedge funds and fund of hedge funds involve a high degree of risk and may not be suitable for all investors. It is possible that an investor may lose some or all of its investment. Before making an investment decision, an investor and/or its advisor should carefully (i) consider the suitability of this investment with respect to its investment objectives and personal situation and (ii) consider factors such as its personal net worth, income, age, risk tolerance, and liquidity needs. Short term investors and investors who cannot bear the loss of some or all of their investment or the risks associated with the limited liquidity of an investment in hedge funds and fund of hedge funds should not invest.