How to join the hedge fund club

Secretive, powerful, and with a history of catering only to the very wealthy, hedge funds were once a closed shop. Not any more. Tim Bennett finds out how ordinary retail investors can get in too .

Anyone following the Northern Rock (NRK) saga may have noticed that, while the headlines tend to focus on figures such as Alistair Darling and Sir Richard Branson, there are a couple of other key players beavering away in the background hedge funds RAB Capital and SRM Global. They may not attract as much attention as the hapless Chancellor or the flamboyant entrepreneur, but as big shareholders in the bank between them they own around 17% of Northern Rock the managers of these funds could scupper the plans of both men.

Indeed, they wield immense power, which lets them scour offers to buy the Rock and then threaten to muster support from other shareholders to block anything they dislike. Meanwhile, other hedge funds have been quietly reaping huge profits by betting on the direction of the bank's share price, which rises every time a new deal for "Northern Wreck" looks to be in the bag, only to fall back as hope fades.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.