Alternative investment


Alternative investment

An alternative investment is regarded as an investment product other than traditional investments such as stocks, bonds, money markets, and/or cash.

As the definition of "Institutional Investor" magazine's "Alternative Investment Newsletter" indicates, alternative investments include commodities, financial derivatives, hedge strategies (or absolute return strategies), real estate, and private equity, as well as venture capital. They are supposed to have very low correlation with traditional investment products. However, this definition may not be suitable due to a fast-changing investment environment and should be reconsidered over time.

Some alternative investment managers, such as hedge funds, cannot advertise or announce their performance under U.S. and European law. Most hedge funds or private-equity groups accept investments from only high-net-worth individuals or institutions.

Although many hedge funds cannot advertise, accredited investors, in accordance with Rule 501a of Regulation D of the U.S. Securities Act of 1933, can access the [http://www.barclayhedge.com BarclayHedge] databases of 6,400 hedge funds and download fund information, including AUM, contact information, and full performance data since inception.

Alternative investment management companies

Alternative investment management companies are the structural (i.e., legal, corporate) entities that manage alternative investment funds including hedge funds and private equity funds.

A single AIMC may operate several investment funds over the course of its existence and, because a many AIMCs are involved in a wide array of investment activities, the term has come to be used to distinguish the financial instruments such as hedge funds from the legal entities that run them.

ee also

*Alternative investment management company


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