Today, the world community has a very large selection of investment tools. These can be classic bank deposits and real estate, as well as mutual funds and non-standard products, like brands and antiques. However, there are some features that should be considered. So, when using traditional type investments, it is difficult to make big profits, and for using alternative instruments it is necessary to deeply understand all the specifics of this market. How to protect your money?
A hedge fund is a well-known and widespread financial structure throughout the world, but in Russia not everyone is still aware of it. Some see in hedge funds only a way to secure their own assets, and some do not want to deal with them at all. However, if this structure exists, it means that it performs certain functions.
What is it?
A hedge fund can be represented in the form of an information partnership in which each of the participants wants to maximize their income from assets invested by investors in the presence of risks, or, conversely, reduce these risks to make a certain profit. The very essence of the work of such a fund is to obtain a systematic profit that comes from investing funds of investors, despite the observed market situation. As a rule, a hedge fund uses both strategies at the same time, replacing one with the other if necessary.
To achieve this goal, one should be guided by rather complicated financial strategies, which include buying long securities, shorting them, applying leverage, and much more. The list of tools used is very wide and varied. Their application depends directly on the specific situation.
What is an investment?
As a rule, depositors' funds are mostly invested in securities traded publicly. But this investment is often not limited to. As a source of income, everything that can bring profit in the future can be considered: currency, land, securities, commodity market and the like. At the same time, not every entrepreneur can use the properties of a hedge fund - only professional or accredited investors can get such access. One of the conditions for world rating companies is the availability of capital of at least one million dollars. At the same time, there are also smaller hedge funds that work with much smaller amounts.
US hedge funds
American hedge funds have been the most profitable for a long time. There is nothing strange about this: their work history is very long, and the legislation perfectly regulates all the nuances. If we talk about hedge funds in the world, it is American companies that have at their disposal one and a half trillion dollars. They have a significant impact on the legislation and policy of the state.
The largest hedge funds here include the Glenview Capital Opportunity, with a yield of approximately 80 percent. Moreover, some time ago the managers of this fund made bets on the reform of the healthcare system, in connection with which shares of medical companies were bought.
Rating of American companies
Other major US hedge funds include:
- Millenium Partners L.P., which has $ 180 billion under control and is known for combining strategies.
- Citadel Global Fixed Income Master Fund Ltd., using fixed income instruments.
- Black River Firv Opportunity Master Fund Ltd., which is known for its participation in the supply of food, agricultural products, as well as industrial and financial results in many countries.
- Bluecrest Capital International Master Fund Limited, which owns investments in the stock and debt markets of America and the UK.
- Adage Capital Partners L.P., headquartered in Boston, specializes in stock trading, and bases its strategy on a thorough analysis of the current value of the stock.
Hedge Funds in Europe
Despite the size of the European financial market, it is very heterogeneous. In some regions, the differences can be very significant. The largest and most significant in Europe are the British hedge funds. Their rating is as follows:
- Odey European, with a return of more than 30% and having at its disposal assets in the amount of more than two billion US dollars.
- Lansdowne Developed Markets is a hedge fund that manages approximately nine billion dollars and has a yield of slightly more than 18%.
- VR Global Offshore has a high return of more than 30%, and the available amount of assets is approximately two billion dollars.
- Pelham Long / Short, managing approximately 3.2 billion assets with approximately 19% return.
- The Cihldren’s Investment is a hedge fund whose reviews are mixed due to its source data. It has assets of 7.3 billion dollars and also has a high rate of return of 30%.
In addition, international hedge funds operate in Europe, including joint ones with the United States. The most striking example is Brevan Howard, which has five founders from different countries. This company builds its work on conservative investments, so that the results of its activities are always stable.
Hedge funds in Russia
In the Russian market, such an economic institution is not widespread. Often, hedge funds in Russia have low, if not negative, returns. Most of them are represented by OFBU and mutual funds and for the most part were created after the collapse of the stock boom in 2008. In total, there are about 60 such organizations in Russia, which is significantly less than in other countries like the United States. This can be explained by the lack of perfection in the legislation governing this issue.
A large percentage of these companies are registered in offshore companies, and this gives their participants opportunities to take advantage of the legislative advantages of other countries, as well as to better protect their funds. But at the same time, there are domestic institutions that are consistently making a profit. This indicates the further prospects of such a phenomenon as hedge funds in Russia.
Rating of Russian funds
One of the undisputed leaders is the VR Global Offshore Fund, which provides an annual profit of more than 30%. To achieve such a high income, the company resorted to blocking funds.
The second place is occupied by the Diamond Age Atlas Fund, which receives a little more than 20% of the total profit. At about the same level is the hedge fund Kvadrat (Kvadrat Black).
The third place belongs to the Copperstone Alpha Fund, which provides 19.1% of the profit. In fourth place is Burnem Asset Management, which has an income level of 17%.
All of the above funds hold approximately 80 percent of funds moving on the investment market in Russia. At the same time, about half of these assets are owned by one of the most profitable participants.
One of the well-known hedge funds
Speaking about Russian hedge funds, one cannot but mention Extranet Investment, widely known to a large circle of people. Its full name is the Extranet Investment Accumulative Fund (EIAF), and it appeared as an auxiliary link for savings programs, as well as for transferring accumulated assets to the management of international companies (brokerage and investment). It is a group of companies that are registered under the laws of the British Virgin Islands.This made it possible for the fund to work as an international organization, as well as completely free from taxation.
Is it effective?
The Extranet Investment hedge fund, the reviews of which are highly controversial, is essentially a hype project, and today it is very long-playing. It has been continuously operating since January 2012. Currently, it has several tens of thousands of investors. Reviews about it are different, as already noted.
The key feature of Extranet Investment is the ability to invest small amounts in it. If most hedge funds start working with amounts from one hundred thousand dollars, then here you can invest from ten dollars. There is also the possibility of inviting other people to the project and making extra money on it.
However, it is worth considering the fact that an investment project having a referral structure always operates on the principle of a financial pyramid. That is, depositors receive payments through income from new investors.
Representatives of Extranet Investment made an official statement that the company made a great contribution to agriculture. However, objective questions immediately arise. When invested in agriculture, a profit of 60% annually seems unlikely.
It is worth noting that his popularity is associated with negative events. So, in the work of the fund in 2015, there were some malfunctions, as a result of which investors lost access to their personal accounts. Subsequently, the functionality of the site was restored, however, some problems with payments sometimes occur.
Is it possible to get good profit with it? This is a moot point, but, according to some entrepreneurs, working with it can provide some benefits. It must be remembered that at its core it is a financial pyramid that is stable only until new members enter the structure. Since you can start working with it with very small investments, the risks are minimal.
Think many times before opening an account with Genesys Private Fund! If this happens, then you have to understand the Cayman Islands in English. And not the fact that the money will be returned!