The Benefits of Investing in Alternatives: Understanding Hedge Funds, Private Equity, and Managed Futures

26 Pages Posted: 17 Apr 2009

Date Written: August 13, 2008

Abstract

In a time when the headlines are abuzz with the latest hedge fund failure and growing uncertainty in the financial markets, many investors are left wondering why anyone would ever invest in alternatives. The general public perception of alternative investments and the reality are very different. The purpose of this paper is to provide qualified investors an accurate description of the investment options available in the alternative universe. The intention is to provide accurate descriptions of the three most common alternative investment vehicles: Hedge funds, private equity and managed futures. More importantly, the goal is to provide investors the necessary foundation to help make informed decisions in their future investment allocations. This paper will address the basics of alternatives, outline the above-mentioned vehicles and the benefits of investing in them, define the underlying risks, and illustrate the importance of working with a professional to uncover the opportunities they present.

Keywords: hedge funds, alternative investments, portfolio volatility

JEL Classification: G19

Suggested Citation

Orczyk, Shana, The Benefits of Investing in Alternatives: Understanding Hedge Funds, Private Equity, and Managed Futures (August 13, 2008). Available at SSRN: https://ssrn.com/abstract=1388662 or http://dx.doi.org/10.2139/ssrn.1388662

Shana Orczyk (Contact Author)

Peak Financial Management ( email )

281 Winter Street
Waltham, MA 02451
United States

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