Offshore Hedge Fund
“Offshore hedge funds” are corporate structures located in a favorable tax jurisdiction which pool investor money for the goal of earning profit. For example, you could have a hedge fund in the British Virgin islands pool the money of investors worldwide, implementing a hedge fund strategy that earns yields exceeding the general market. Since hedge fund investments have become so common, many now are structured offshore for the privacy, regulatory, and tax benefits. Let’s face it, if you are a manager, it’s hard not to take advantage of the perks of offshore hedge funds.
In today’s hedge fund market, opportunities are scattered pretty thin. Though many high yield hedge fund strategies have failed in recent years, others have prospered. For example, smart hedge funds could of invested in distressed real estate, earning significant profit during the housing crisis. Also, they could of shorted equities or commodities, earning a killing last year. The real truth is, hedge funds are nothing more than a corporate structure, and strategy is the sole determinant of success. Don’t get caught up in the negative publicity, the wealthiest in the world still invest in these funds everyday.
In summary, hedge funds are corporate investment structures which provide a mechanism for pooling and investing funds. You must remember, though a hedge fund can be used in various investment scenarios, all funds are NOT the same. One fund may invest in fixed notes, and another may trade options in the commodity markets. Each of these activities involves varied levels of risk and reward. If you think any different, you have most likely been brainwashed by the media. The reality is, two “hedge funds” can be as different as day and night. The hedge fund manager’s job is to create high yields, and though all managers desire profit, they all have a different method of attaining it. For more detailed information on hedge fund investments, take a look at our extensive category. It has everything you need to know, and more….