Getting Started in Hedge Funds: From Launching a Hedge Fund to New Regulation, the Use of Leverage, and Top Manager Profiles, Third Edition

Introduction

Why Hedge Funds Now and Forever?

Over the past 10 years, hedge funds have gone from relative obscurity to being a topic of cocktail party chatter and the place to work on the Street to being blamed for everything that is wrong in the world of finance and beyond. Hardly a day goes by without a report of how hedge funds and those who provide services to them are reaping benefits on the backs of unsuspecting and unwilling victims around the globe. In the wake of the credit crisis and the government-led bailout of the banks, hedge funds and those who manage and invest in them have become the most talked about investment products since the Internet initial public offerings (IPOs) of the technology boom.

The rise from obscurity began with the astronomical returns that many hedge funds posted during the euphoria that swept the investment world at the close of the last century and the new century's first decade. These outsized returns have led to interest by investors of all shapes and sizes in years leading up to the credit crisis. In the post–credit crisis environment, interest in hedge funds and those who manage these—often thought of as secretive—investment vehicles has been sparked by the opposite: losses racked up in the past few years by many of the hedge fund world's most famous and sought-after managers. At the beginning of the new millennium, the issues for investors were “How do I invest?” and “How much can I expect?” At the halfway point of the decade the issues ...