What is a hedge fund?

Hedge funds are one of the popular ways to invest among wealthy investors, but how do they work?

Hedge funds
(Image credit: Getty)

Hedge funds are just like any other fund. A manager pools money from a number of investors and invests it on their behalf, but unlike the traditional funds you and I might use, these funds are not open to your average private investors. 

They’ll typically require minimum investments of upwards of £100,000 or more. This is because hedge funds tend to use more exotic investment strategies that financial regulators deem too risky for ordinary investors.

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Jacob Wolinsky

Jacob is an entrepreneur, hedge-fund expert and the founder and CEO of ValueWalk. 

What started as a hobby in 2011 morphed into a well-known financial media empire focusing in particular on simplifying the opaque world of the hedge fund. 

Before devoting all his time to ValueWalk, Jacob worked as an equity analyst specialising in mid- and small-cap stocks. Jacob also worked in business development for hedge funds. 

He lives with his wife and five children in New Jersey. 

Jacob only invests in broad-based ETFs and mutual funds to avoid any conflict of interest that could arise from buying individual stocks.