Hedge Funds

Hedge funds are collective investment institutions ruled by a free investment regime. In the CII many participants provide funds and the Hedge fund is in charge of their management, with the main objective of obtaining the highest profitability through the investment. In addition, the “free investment” characteristic distinguishes them from the rest of the investment funds in having a higher level of freedom to manage their funds, normally investing in more risky assets. To assume a higher risk enables them to obtain a higher profitability, but, on the other hand, the opposite situation may also happen, higher losses. They use different investment strategies: short-term operations, long-term operations, leverage, trading, arbitrage, complex statistical models…

The origin of the last financial economic crisis originated in the United States in 2007 began with the fall of the Hedge fund Bear Stearns.

In Spain there are two types of Hedge Funds, called “Free Investment Funds” or “Free Investment Society”. The National Securities Market Commission (CNMV) is the institution that establishes their regulation in Spain.

Example: “Many of the hedge funds were set up over the last year to invest exclusively in virtual currencies. The research firm Autonomous Next has said the number of such hedge funds has risen from around 30 to nearly 130 this year alone.”

Source: https://www.nytimes.com/2017/11/06/technology/bitcoin-hedge-funds.html

Video:  https://www.youtube.com/watch?v=5ItfdOC1B9Q