Associate Arts Editor
According to Kim Miller, a Lincoln Park resident, hedge funds are “investments that have aged over time.”
In an interview with Brian Flores, a Wicker Park native, hedge funds are “a type of pension that one gets after investing in stock.”
In short, neither were correct. A hedge fund is an investment firm that applies high-risk procedures such as lending money and selling short. This procedure is conducted so as to increase the possibilities of “extraordinary” capital gains. Many hedge fund companies are unregistered investment firms that are accredited by the Securities and Exchange Commission (SEC). In order to meet the SEC’s expectations, a hedge fund must either be supported by investors or have more than 5 million dollars in total assets.
In order to invest with a hedge fund, an individual must have a net worth greater than 1 million dollars with or without their spouse. Exceptions are made if the individual’s income has been greater than $200,000 within the last two years prior to the investment and there is the expectation that it will continue to grow in the near future.