What's the difference between private equity funds and hedge fund? - hedge fund business
I read in Business Weekly that invest the pension funds, foundations, university and other large investors in hedge funds and private equity funds. The graph shows the returns that private equity funds were much higher than the hedge fund in 2006 and 2007, but also increases losses in 2008. What is the difference between the two? Did they invest in different products? If not, the basis on which a pension would choose to invest in one or the other? Thank you!
Monday, December 21, 2009
Hedge Fund Business What's The Difference Between Private Equity Funds And Hedge Fund?
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1 comments:
Interesting question. The two represent different asset classes, returning with their cycles. Pension funds and endowments of all those who seek exposure to different asset classes to diversify away the risk.
Hedge funds typically invest in publicly traded securities, foreign exchange, derivatives, etc., and offer interesting strategies. There is a long list of these strategies, with names such as portable alpha, absolute return, 130-30, long-short-stat-ARB, and so on. But they are easily controlled investment vehicle. Managers through the sharing of the benefits funded through any obstacle. His experience in the markets, modeling, trade.
Private equity funds are OTOH corporate finance and management in nature. Usually try to companies whose shares can be harsh at times, or are generally pleasing, with a market value (including the acquisition premium) identify, is significantly lower than the value of the company. We also buy private companies, if there is an opportunity and a lack of liquidity, change of business model, the death of the holder of a major conflict, etc. The business streamline, toCompany to deliver a better administration, get unnecessary things to get fit and attractive, and they sell to another buyer or re-IPO. It is his game. Are PAHO / specialists in finance, maybe with a little experience in specific vertical.
HTH
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