Aren hedge funds risky?
Many individuals in the professional investment community believe hedge funds to be speculative investment vehicles which take highly leveraged, directional bets based on broad macroeconomic or market views. This tainted image is partly as a result of articles in the press which refer to Global Macro funds such a Julian Robertson’s Tiger Fund or George Soros’s Quantum Fund. The Long Term Capital Management (LTCM) debacle opened the public’s eyes to other forms of hedge funds and the dangers of leverage, but again distorted people’s views of the industry.