Hedge fund
Definition · Level 0 · Market basics
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A lightly regulated private investment pool for wealthy and institutional investors that can go long and short and use leverage and derivatives; classically charges “2 and 20”: 2% of assets plus 20% of profits.
Example
“2 and 20” on a $1B fund: $20M a year of management fee whatever happens, plus 20% of any profits.
Where Tradecraft teaches it
Level 0 · Market basics, in the lesson “What markets do”: Why markets exist, the main asset classes, and how new securities reach investors.
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