Hedge Fund Regulations

Next Video:
Do You Have to Pay Income Tax on Gifts?....5

Currently, there are very few regulations on hedge funds, which is a term for groups of people that make joint investments. Learn about the future regulations of hedge funds with information from a portfolio manager in this free video on finance.

Part of the Video Series: Credits, Stocks & Pension
Promoted By Zergnet


Video Transcript

Are you considering investing in a hedge fund? Hi, this is Roger Groh at Groh Asset Management. Why? What are the advantages? Well, one of the biggest advantages in hedge funds, which is just a term for groups of people that have come together to make investments, is that the great majority of what they do is unregulated, meaning governments both at the state and federal levels leave you alone. So what rules does a hedge fund have to follow? Well, if there's been an offering to limited partners, the partners are entitled to financial data as spelled out in the agreement that you made with the general partner when you invested your capital. The government is still going to be very interested in the profitability of the hedge fund to get any income tax or capital gains tax that they might be entitled to. The Securities and Exchange Commission in the United States is looking into the hedge fund business to decide if it, in fact, should be regulated. My thought would be no, stay out of it. Let the investor figure out what's appropriate or not. Remember, a hedge fund is just a term for people that have come together to buy an asset. It doesn't mean that they're doing anything wrong or special, although in some cases, the rates of return are significantly higher than others. Why? They tend to take more risk. You have to be able to handle that and read the prospectus very carefully before investing your capital. Talk to your lawyer, talk to your accountant. I'm Roger Groh of Groh Asset Management, and I hope that helps.


Related Searches

Is DIY in your DNA? Become part of our maker community.
Submit Your Work!