A Bloomberg report revealed that Hedge funds had attracted a lot of investments lately. There are many positive reasons for that development. The allocations in the sector are at the highest level as compared to the past three years and are estimated at $3 trillion. According to an article published by Gareth Henry on his medium account, the allocations have increased with a 16% margin from last year.
After the financial crisis that hit the country more than a decade ago, the investor confidence in the sector reduced significantly. Hedge funds are currently ranked second after private equity but they are growing at a faster rate. The alternative assets also involve taking risks. Just like any other investments, the higher the risks, the higher the potential returns.
As hedge fund manager, Gareth Henry explains that hedging is a business practice where the investors focus on reducing the potential losses and increasing the profits. Hedging is helpful in ensuring profitability even during unfavorable economic times. The law allows the hedge funds to choose their preferred area of specialization in the finance industry. However, they only accept deposits from individuals with a high net worth or professionals in the sector.
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One of the main lessons from the financial crisis which occurred in the country is that an investor’s perspective is crucial in making good returns. Some of the investors who did not withdraw their assets have experienced an increase in value.
One of the unique features of this hedge funds conceived by Gareth Henry is that they give good returns when there is high volatility in the market. Volatility occurs due to the increase in interest rates. According to investment expert, Gareth Henry, hedge funds have reduced the fees for their clients and changing some of the applicable rules to encourage more people to venture into the industry.
For example, some of the firms have introduced a strategy where an investor can invest through separately managed accounts. The provision allows individuals to commit more money and pay lower fees. In 2004, the number of hedge funds were 5,000 while the number currently stands at 11,000. The increase has led to increased access to information about making investments in the sector.
Gareth Henry graduated with a degree in Actuarial Mathematics and Statistics from Heriot-Watt University in 2001. He became the Director of Strategic Solutions at Schroders. After just 2 years, Gareth joined Fortress Investment Group. Today, Gareth is based in New York where he worked as the Global Head of Investor Relations for Angelo, Gordon & Co. raising capital for private real estate and credit products.
Visit garethhenry.com for more details about Gareth Henry.