Their goal is to benefit when the price of a security goes up

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Their goal is to benefit when the price of a security goes up. Most hedge funds are in this category. Examples include: Tiger Global Management, Glenview Capital Management, and Millennium Capital. Distressed capital hedge funds: These are funds that invest in companies that are going through a difficult period. When companies are in trouble, their stocks usually trade at depressed levels. Therefore, these funds buy their stocks with the goal of fixing them.


The risk in all this is when a company goes bankrupt. Long-Short funds: These are central african republic business email list hedge funds that invest in stocks they believe will move up and shorting those they believe will go down. The benefit of this is that the losses of one portfolio is usually offset by the gains of the other. Examples of these hedge funds are Third Point Management and GreenLight Capital.


Arbitrage funds: These are funds that use correlations in investments. For example, merger arbitrage funds buy companies that are being acquired while simultaneously shorting companies that are acquiring. Other types of arbitrage funds are those that use political arbitrage, risk arbitrage, and fixed income arbitrage funds. Starting a hedge fund As mentioned above, hedge funds collect funds from outside investors and then invest for them. Their investors are usually high net worth individuals and institutions like pension firms.