Hedge Fund Investors and HIstorical Performance
In the second video of this series, Trevor identifies who invests in hedge funds, and the key requirements investors use when assessing investment decisions. He then moves on to the performance of hedge funds over the last three decades.
Overview
A wide variety of investors choose to invest in hedge funds with pension funds being the largest category. They are drawn to hedge funds thanks to the low correlation with their other assets and ability to generate alpha, or excess returns. These returns are generated with the use of leverage or borrowing which allows hedge funds to take risks in excess of regular funds. Although hedge funds have underperformed the S&P over the last 25 years, they have been less volatile and provide a better investment on a risk adjusted basis.
Key learning objectives:
Who invests in hedge funds?
How do hedge funds use leverage to generate returns?
How have hedge funds performed?
Summary
Expert
Trevor Pugh
Trevor has worked in finance since 1995. He started his career in investment banking after studying Law at Cambridge and taking a Masters Degree in Financial Services from University College Dublin. Trevor spent 18 years at Barclays investment bank where he became a Managing Director and head of Gilt trading. He currently works as Chief Operating Officer for a hedge fund.
