Hedge Fund

Past version: effective from 22/03/2006 - 10/07/2010
To view other versions open the versions tab on the right

A Hedge Fund which has some or all of the following characteristics:

(a) it has a broad mandate giving its Operator flexibility to shift strategy;
(b) it is aimed at achieving absolute returns rather than returns relative to the market;
(c) it employs some or all of the following techniques:

(i) the pursuit of absolute returns or "alpha" rather than measuring their investment performance relative to the market;
(ii) the use of short selling;
(iii) the use of Derivatives for investment purposes;
(iv) the use of economic or debt leverage as well as leverage embedded in financial instruments such as Derivatives;
(v) the acquisition of distressed debt with a view to its realisation at a profit; or
(vi) the acquisition of "high yield" debt Securities; or
(d) it charges performance-based fees in addition to a management fee based on the volume of assets under management.