Class A funds are agency investment systems established according to certain trust deed principles. The trustee, the trustee and the beneficiary conclude a contract, and the management institution (trustee) manages the trust assets; Bank or trust company (trustee) keeps trust assets; Investors (beneficiaries) enjoy investment income.
Class C funds operate in the form of joint-stock companies. Investors buy shares of the company and become shareholders of the company. Corporate funds involve four parties: investment companies are the main body of corporate funds.
Precautions:
1, risk management
Hedge fund management companies may hold a large number of short-term positions or have a particularly comprehensive risk management system. The fund can set up a "risk officer" to be responsible for risk assessment and management, but it can not interfere with the transaction, or it can adopt a formal portfolio risk model and other strategies.
Various measurement techniques and models can be used to calculate the risk of hedge fund activities; According to the different fund size and investment strategy, fund managers will adopt different models. Traditional risk measurement methods do not necessarily consider the normality of returns and other factors. In order to comprehensively consider all kinds of risks, we can make up for the defect of using VaR to measure risks by adding models such as impairment and "lost time".
In addition to evaluating the market-related risks of investment, investors can also evaluate the risk that the mistakes or frauds of hedge funds may bring losses to investors according to the principle of prudent operation. Matters that should be considered include the organization and management of business by hedge fund management companies, the sustainability of investment strategies and the ability of funds to develop into companies.
2. Transparency and regulatory issues
Because hedge funds are private equity funds, there is almost no requirement for public disclosure, and some people think it is not transparent enough. There are also many people who believe that compared with other financial investment management companies, hedge fund management companies are subject to less supervision and lower registration requirements, and hedge funds are more susceptible to special risks caused by managers, such as deviation from investment objectives, operational errors and fraud.
3. The same risks as other investments.
There are many similarities between the risks of hedge funds and other investments, including liquidity risk and management risk. Liquidity refers to the ease of buying, selling or realizing assets; Similar to private equity funds, hedge funds also have a closed period, during which investors cannot redeem them.
4. Too much investment in a certain strategy will lead to capacity risk. If the fund's exposure to an investment product, department, strategy or other related funds is too large, it will cause concentrated risk. These risks can be managed by controlling conflicts of interest, limiting the allocation of funds and setting the scope of strategic exposure.