Ebele Kemery: Getting a Grip on Hedge Fund Investments

When it comes to the term hedge fund, you will find that it cannot be easily defined, and that not always does it imply that a hedging technique has been used. A large number of the hedge funds that one can invest in today will use a variety of different strategies.
 
Most of the hedge funds that are available today are usually structured as a partnership, where the general partner is the one that manages the portfolio. It is this partner who is the one who will make the decisions with regards to hedge fund investing, whereas the rest of the partners in the partnership will be the ones who are actually making the investment. This financial market does not have nearly as much of the red tape and regulatory restrictions that similar investments, such as mutual funds have.

As the manager of the hedge fund portfolio, the general partner aims to produce targeted returns or absolute performance from the investments they make, no matter how the rest of the financial market is doing. As mentioned previously these people will employ several different techniques or strategies to help them achieve their goals. Whereas some prefer to use equity, fixed-income or CTA portfolio strategies, there are some hedge fund managers who prefer to use mathematical algorithms in order to make the right sorts of returns for their investors.
 
Just like any other kinds of investments, those who manage a hedge fund are subject to the same financial rules and regulations, as are other traders. However, when it comes to the strategies that they employ you will find that these kinds are not so easily accessible to others who manage regulated investments such as mutual funds, so there is a higher amount of risk to the investment a person makes, although the rewards are also greater.

 
In order for a hedge fund manager to achieve an absolute return on their investment, they need to be flexible. As previously mentioned they also need to employ and incorporate a number of different strategies and techniques to achieve the above. Below are some of these strategies mentioned by Ebele Kemery.

1. Short Selling - A hedge fund manager will select to sell a security that they do not actually own in order for them to then purchase it back at a later time for a price less than what it was originally sold for. If they do this properly, they could end up making a considerable profit on the initial investment that they made.
 
2. Arbitrage - This type of investment technique allows the hedge fund manager to buy and sell a financial instrument in a number of different markets at the same time. This then allows them to make a profit from the difference that has arisen between the buying and selling prices.
 
Along with the two hedge fund techniques we have mentioned above some managers will also use hedging and leverage in order to get a good return on their investment. Hedging allows them to buy or sell a security that they do own in order to use the funds as a way of offsetting against any loss that the investment may otherwise have made. As for leverage, a manager of a hedge fund portfolio arranges to borrow money so that they can invest in a particular financial product, and the money made from the investment can then be used to pay the borrowed money back.
 
Ms. Ebele Kemery is a Portfolio manager - Head of Energy Investing at JPMorgan Asset Management. Ms Kemery is a Commodities Leader with a track record of consistently profitable trading efforts and satisfies all risk management requirements.
To know more please visit: http://ebelekemeryny.tumblr.com