What Is a Hedge Hunter?
"Hedge Hunters" is the name of a 2007 book by Katherine Burton. She coined the term "hedge hunter" as an amalgamation of the terms "hedge fund manager" and "head hunter." The term conveys the aggressive and investigatory natures of the world's top hedge fund managers, possibly in a derisive or critical sense.
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Head Hunters
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In its original sense, the term "head hunter" refers to fierce warriors from tribal societies who take the heads of those whom they have killed as trophies, often shrinking them and using them as objects of trade. In the modern professional world, a head hunter can also be a recruiter who looks for highly qualified professionals and finds ways of persuading them to accept employment at a particular company. In both senses, head hunters are highly competitive people who press forward aggressively toward a goal. This sense applies to hedge hunters as well.
Hedge Funds
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A hedge fund is an investment scheme that seeks to use highly selective investment techniques to minimize the level of investment risk through careful diversification while bringing rates of return higher than what general stock and bond investments can bring. Multiple investors pool their liquid assets into hedge funds, hiring a hedge fund manager and possibly a staff under him. In this way, investors can enjoy the help of highly skilled investment professionals at a minimized cost.
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Hedge Fund Managers
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Depending on the size of the hedge fund, a hedge fund manager may make all investment decisions on his own or delegate responsibilities to subordinates. Either way, unlike mutual fund managers, hedge fund managers are known for their aggressive portfolios. Instead of relying on a high level of diversification to turn a moderate profit from a large number of safe investments, hedge fund managers often focus on specific types of investments, relying on specialized expertise and keenly analyzed information to take advantage of current economic trends and turn a substantial profit. A hedge hunter could be a particularly aggressive or skilled hedge fund manager.
Hedge Fund Controversy
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Part of the reason that Katherine Burton and others may use such a potentially pejorative term to describe hedge fund managers is because controversy surrounds the very institution of hedge funds. For instance, according to Businessweek, hedge funds go far beyond the buying and selling of publicly traded stocks and bonds when they make their investments: they also make loans, sit on corporate boards and engage in other matters of trade that allow hedge fund managers to become privy to nonpublic information, thus allowing them to make highly influential investment decisions based on nonpublic information. While such behavior is by no means definitive of hedge fund managers, news of such aggressive and questionable investment practices can cause critics to refer to specific hedge fund managers or hedge fund managers in general as hedge hunters.
Positive Interpretations
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While some may interpret the term "hedge hunter" as something negative, others may not. Investors who put their assets into hedge funds may want to feel assured that the hedge fund manager in charge of the fund's investments is someone who is highly assertive and competitive and who hunts for the best possible investments. For this reason, some hedge fund managers may welcome the term.
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