Hedge Funds: Big Money, High Risks. What is a hedge fund: in simple terms The largest hedge funds in the world

Over the past month, I have studied hedge funds the most. I have read a lot of articles about hedge funds, but I have not read a single book, because I did not find the very book about hedge funds, which describes in detail the process of creation and management in Russian (if anyone knows, write). When you start exploring this whole vast world, it seems that hedge funds are something unattainable, that only some brilliant financiers and people who have been working on Wall Street for 10 years can create and manage hedge funds. However, as you go deeper, you realize that this is all a myth created by Wall Street itself. Of course, creating a hedge fund and managing it competently is not easy and even difficult, but it is not incredible. I compare starting a hedge fund to starting a business. After all, a business must also be created and this business must also be properly managed. Just like in business, a manager must have some kind of strategy, an idea, a plan for which he must create and manage the fund. In this article, I will try to cover the process of creating a hedge fund as deeply as I can.

Let's imagine that you recently graduated from an institute as a financier, worked for an investment company for five years, simultaneously trading on the stock exchange, accumulated a certain amount (let's say $ 100,000) and decided that you need to open your own fund. You have drawn up an investment plan and strategy and started learning about hedge funds. You realized that it is much more difficult to create a hedge fund in Russia and find investors than, for example, in the USA. You decide to leave for New York. You spend $ 500 on visa and tickets, get a business visa and leave for New York. In a week, you spend about $ 1000 on everything there on average. This will cost approximately $ 40,000 per year. You have about $ 60,000 left to create a fund. In a week you are fully settled and are now ready to start. You start small, but not less important. You come up with the name of your foundation so that you can formally fill out the paperwork. Also you are looking for a registrar to help you. You find a large consulting company with experience in registering funds in various territorial jurisdictions. On average, the payment for agency services for registering a fund is $ 1150, since we cooperate with a large company, let the payment be $ 2000. Payment of registration fees and charges is $ 350-500, and the licensing of the fund is $ 1000. Together with your registry, you come to the conclusion that the Cayman Islands will be your offshore country, since this is the most popular place for registering funds, the country is quite reliable, there is a wealth of experience in this area, many procedures have been simplified and small taxation. Next, you need to register a management company. There are 2 ways here: either register your own management company (it is possible to take a separate professional trader as a manager), or hire it. In the first case, it will cost you about $ 10-15 thousand one-time. In the second, you will pay a predetermined percentage of the profits of your fund (usually from 20 to 30%) constantly. But since you have drawn up an investment strategy and plan and you yourself are interested in managing the fund, you choose the 1st method and create a limited liability company. Your next step is to find a custodian bank (guarantor). Better to attract a large bank. Also, you pass exams in finance and receive the necessary papers to authorize the management of investors' money. You have received all the necessary documents, registered the fund. Now you need to find investors. You hire specialists with social activities, marketers (let's calculate minus $ 5,000). They find 10 investors (necessarily accredited), you meet with them and let's say you convince 7 of them to invest in your fund. And your capital is a small amount of $ 100 million for hedge funds. You rent an office on Wall Street, pay for the office yourself for the first month (minus $ 20,000) and look for staff. You need a quality lawyer and administrator who is obliged to determine the net asset value for a certain date (the larger the fund, the more often this happens: daily, weekly or monthly). An independent auditor will be elected by the board of directors. You also find some good traders, investment advisors and analysts. You choose a reliable broker with all the necessary licenses, open brokerage accounts (a package of documents and certification services) - $ 3000. You also pay additional packages of documents for the apostilled fund - $ 5800. As a result, your fund is ready and you start earning millions or even billions of dollars. If you count everything, it turns out that $ 60,000 is enough to create a hedge fund and there is no need to be a millionaire.

I have tried to describe in detail the process of creating a hedge fund. Some information was taken from articles. If I wrote something wrong (I could be wrong too) or you disagree, then write in the comments and we will try to fix everything. More information can be found here

The familiar word “hedging” means minimization. Upon learning this, a novice investor may think that investing in hedge funds is less risky than other types of investing. Let's see how safe a hedging strategy is and whether it can protect capital.

What is hedging and how is it applied

I have been running this blog for over 6 years. All this time, I regularly publish reports on the results of my investments. Now the public investment portfolio is over 1,000,000 rubles.

Especially for the readers, I developed the Lazy Investor Course, in which I showed you step by step how to put your personal finances in order and effectively invest your savings in dozens of assets. I recommend every reader to complete at least the first week of training (it's free).

The concept of "Hedge" is translated from English as a hedge, obstacle or obstacle. Based on this, hedge funds are created with the aim of countering investor losses. In one of the articles I already wrote about. It is actively used by banks opening positions to buy a rising currency against a falling one. As a result, they not only protect their balance sheet from losses, but also make a profit.

There are two main types of hedging:

• through purchase (long), in order to insure against future price increases;
• through sale (short), the goal is insurance against price reductions.

Hedging is a combination of long and short positions in a certain proportion by buying undervalued and selling overvalued assets. For example, buying growing stocks while simultaneously opening short positions on stocks of companies that are predicted to go down. If the calculations are correct, it helps to protect the profits made from the purchase of rising stocks.

This is precisely the case when the manager does not care in which direction the market is moving. As a rule, it is not a physical commodity that is bought and sold, but instruments of the derivatives market or currency. The entire transaction value is not necessarily hedged. At any risk, the price of the supplied goods, the exchange rate or will not fall to zero. Therefore, it is not uncommon to use partial hedging of a contract.

Any deal is not free, since assets are borrowed from a broker. However, even taking into account the reward for the intermediary, it can be beneficial. For example, securities sold short and falling in price are then bought off at a profit. By opening a long position, the hedger keeps growing assets and sells after their price increase. Minus the broker's commission, he makes a profit. Thus, the hedger makes money in both a rising and a falling market. provided by the broker is used as leverage to increase profitability.

You can hedge using various instruments:

1. Trades in the opposite direction from an already open position. For example, a simultaneous game in the markets of two countries with a difference in the rate.
2. Conversion of the deposit into the currency for which growth is planned. Example: Converting assets from ruble to dollar can be a great way to hedge currency risks. This was beneficial in 2014 or in the first quarter of 2018, on the eve of the imposition of sanctions. But in 2016–2017 it would have brought a loss multiplied by the leverage.
3. hedging, when a contract for the purchase of a stock asset or currency is deferred. Thus, the seller and the buyer agree that the goods will be delivered in the future at their present value. Also, forward contracts, margin CFD contracts for difference in prices are close in mechanisms.

The terms of the contract may also be different:

1. Direct execution of the contract in the future at an agreed price.
2. Inclusion of insurance conditions in the contract, for example, on the division between the parties of both profits and possible losses;
3. Interest rate hedging, when a currency is exchanged at the current rate and placed on a bank. This is used when money is needed in a few months, and the course may move to a disadvantage for you.

How hedge funds work and what they are for

The definition in Wikipedia states that it is "an investment fund focused on maximizing returns at a given risk or minimizing risks at a given rate of return." To understand how this tool works, let's dig a little deeper.

Hedging operations were known long before the advent of specialized funds. The Chicago Stock Exchange used commodity futures as early as the 19th century. The history of the hedge funds themselves began in the late 1940s in the United States. The first fund was created by Alfred Jones. Although he was an amateur investor, he successfully shorted stocks of companies on a downtrend. In the 60s, hedge funds already numbered in the dozens, having won the recognition of investors. The peak of the popularity of such strategies came in the 80s, when the amounts in management reached several trillion dollars. The largest concentration of hedge funds in the world is located in the City of London (over a third).

A classic example of a hedge fund is Quantum, led by George Soros. The latter became famous for earning a billion-dollar profit from shorting the British pound in 1992. He is also known for investing in the Russian economy, where losses from the 1998 crisis amounted to an amount comparable to the gain on the pound. To get a better idea of ​​what a hedge fund is, review the movie "" ("The Big Short"), based on the book by Michael Lewis.

The main elements of a hedge fund structure are:

• Asset Manager - Management Company, which determines the strategy and operational support;
• Custodian (usually a guarantor bank for transactions);
• Independent auditor - sets the value of assets and maintains the accounting department;
• LegalAdviser - provides legal support.
• Prime broker (usually an investment bank) - makes transactions on behalf of the fund, lends assets, etc.

One of the features of hedge funds is their low regulatory requirements. Managers are relatively free in their choice of tools. Investor asset management professionals use a wide range of strategies. These include leverage and complex derivatives. This explains the fact that access for non-professional investors (nonqualified investors) is very limited, and in most cases it is completely closed. As a rule, a depositor cannot invest less than a million dollars (in Europe from $ 100 thousand), and the number of participants should not be more than 100.

The result of hedging can be not only containment of risks of losses, but also limitation of potential profits. After all, if you guessed the price movement, then opening a trade in the opposite direction will put you on this correct course. Why are such operations carried out? The answer is obvious: funds deal with clients' money and use a lot of leverage. Under these conditions, investors' funds need insurance, and the fund receives its profit in the form of a management fee.

Is the game worth the candle

In 2008, Warren Buffett entered into a $ 1 million bet with Protégé Partners, which manages a portfolio of 5 hedge funds. Its founder J. Terrant and head T. Sides admitted defeat in 2018 and gave all the lost money to charity. has grown over 10 years by 80%, and active management funds - by 22%. However, it is worth noting that the market at this time grew phenomenally after, and hedge funds perform better than the index in a falling market. If Buffett lives to see the next global crisis and makes another bet, he is likely to lose.

There are stars among the funds in terms of profitability, but they are rather the exception:

By itself, hedging does not aim to extract excess profits. The main task is to protect the price of goods or the exchange rate from. The average net profitability of hedge funds over the past 20 years has been about 4-6% per annum. For comparison, they can give from 6 to 12%. Consider also the restrictions on private investors that exist in hedge funds. And the management fees in ETFs are significantly lower. So, index ETFs take an average of 0.36% for management, while Vanguard Equity Income fund - 0.26%. Hedge funds typically charge around 2% plus 15-20% of asset growth.

Benefits of hedge funds:

• can make money not only in a growing but also in a falling market;
• a wide range of investment instruments: stocks, bonds, currencies, futures, options, etc .;
• freedom of managers in choosing a strategy, which potentially increases profitability;
• able to smooth out the consequences of crises and, reducing the drawdown compared to the index.

Disadvantages:

• relatively high trading risks, including those associated with the use of leverage;
• inaccessibility for unqualified investors;
• high entry threshold;
• at the stage of a growing market, on average, they lose to indices in profitability;
• negative trail from high-profile financial pyramids;
• you can enter only at the stage of formation;
• it is permissible to sell your share only within the fund.

Considering the role of hedge funds in the global crisis of 2008, today they have lost their former function. The story of the Madoff Foundation, which received 150 years in prison in 2010 for organizing a financial pyramid, received particular resonance. The best results come from “one manager funds” like Buffett and Soros, who are already in their old age. However, until now at least 10,000 funds around the world find their clients. Today the so-called time is running out. unregulated funds: increased transparency, regulatory control. Investments in a modern hedge fund are most often made through a bank account. At the same time, non-trading risks are reduced, since the account belongs to and is controlled by the investor.

The share of hedge funds in the global investment market is about 10%. The outflow of funds from them is about $ 100 billion a year, and the share is gradually decreasing. Within the funds, the share of funds of institutional investors (banks, etc.) in 2007 exceeded the share of individuals. This is a market for large players, and its consolidation continues.

There are two misconceptions among investors:

1. Hedge funds are designed to take risks away from their members. The truth is that even with such a wide range of speculative instruments, investment risks cannot be completely removed. Hedge funds don't really have that task. The goal is to optimize the risk-reward ratio. In other words, it is not about protecting against risks, but about managing them.
2. At the other extreme, hedge funds carry an excessive risk of losing capital. Many of their strategies do use aggressive instruments. However, this does not mean that managers are irresponsible, aiming to receive commission regardless of the profits of their clients. Most funds are focused not on maximum profitability, but on protecting participants' funds from market volatility, etc. In the end, the client can always choose a conservative fund or order a low-risk portfolio.

In the portfolio of a wealthy investor (from $ 1 million), hedge funds can be present with a share of up to a third of assets. It will be good in case of a global crisis. It is better to choose funds offered by large banks such as UBS or Barclay. The selection can be made using specialized services, for example, europe-finance.ru, Barclay Hedge, Morning Star (the last 2 are in English) or from your broker. When choosing a fund, you should pay attention not only to the profitability, but also to the duration of its history, which guarantor bank is behind the transactions and to the manager's reputation.

Hedge funds in Russia

The legal opportunity to open hedge funds in Russia appeared only in 2008. The first such fund was the "Private Investment Fund 05.09" from Alfa Capital (ceased to exist in 2012). The second unsuccessful attempt by the same broker was the Corporate Investment Fund 09.10 (closed in 2014).

The closest “relatives” of hedge funds in Russia are OFBU (General Funds of Banking Management). They consolidate assets (including foreign ones) in the form of cash, securities, and various derivatives under a trust management agreement. The OFBU are established by banks that have received special accreditation c. The investor receives a certificate of rights to participate in the property of the fund. Management fees depend on the amount and duration of the investment and can vary from 0.5 to 3%.

Additionally, the manager receives a percentage of the increase in the share. The minimum investment amount in different funds is from 10 to 100 thousand rubles. You can view the current list of bank management funds, for example,. Since 2013, the registration of new OFBU has been discontinued. Relative freedom in choosing a strategy and vague guarantees for private shareholders played a role in this.

If you want to choose an affordable collective investment option for yourself, it is better to consider an alternative in the form of an ETF. The Russian version can be, which is a distant analogue of a hedge fund. Moreover, according to Russian law, OFBU is a kind of mutual funds. Unlike contributions to OFBU, a share of a classical mutual fund has the status of a security. While there are only a few funds with positive returns among OFBUs, mutual funds are showing relative stability. But the main difference is that unqualified investors can invest in ETFs and mutual funds.

A qualified investor is one who owns property (securities) in the amount of at least 6 million rubles. or has experience in an investment company, or makes transactions at least once a month (on average, 10 times a quarter) and has a specialized education.

In Russia, the choice of analogs for hedge funds is extremely limited, and the funds themselves are not very popular. Information on them is mostly closed, statistics on monitoring services are not published. Therefore, domestic investors are guided mainly by foreign markets. If you are a qualified investor and have an impressive amount, then in order to participate in a hedge fund, you will have to open an account with a foreign bank, which will buy fund shares on your behalf. The choice can be made either independently or you can entrust this issue to the bank. A more attractive, affordable and widespread alternative is foreign ETFs.

Unfortunately, the selection of ETFs on the Russian market is limited. From the available probabilities, you can use:

• purchase units of a mutual fund investing in ETFs;
• through a Russian broker (access to a foreign exchange - mainly through an offshore company);
• through investment products overseas;
• directly through a foreign broker operating in Russia (Saxo Bank,);
• at the Moscow Exchange, for example, through UK Finex.

You can learn more about the structure of hedge funds and the procedure for investing in them in the video from NES (Russian School of Economics)

Profit to everyone!

Today, the global hedge fund industry numbers more than 80 companies, whose investment advisors have been teams from Russia. At the same time, almost 70% of AuM funds do not exceed $ 50 million, and only 20% of managers manage amounts of more than $ 100 million. The track record of almost half of Russian hedge funds is less than five years old. About 70% of managers specialize in trading in local markets, while the rest operate globally.

The next rating of hedge funds includes 48 funds with published results for 12 months last year. Five of them had already ceased to exist at the time the rating was compiled (highlighted in color in the rating. - Ed.). The average track record length of participants reaches 5.5 years, which is a significant indicator for the Russian industry. The longest track record - 18 years - belongs to Prosperity Russia (A).

The industry's average losses last year were nearly 20%. Only six funds remained in the zone of positive profitability, and the profit of the top three is calculated in double digits. The rest of the funds failed to break even: 35 hedge funds in the rating lost 10% or more.

In the first place at the end of the year was the GRW fund, which implements strategies with futures and options and trades mainly on the Russian market. It also showed one of the highest levels of volatility in 2014. High volatility (61.9%) was shown only by the worst fund at the end of the year - Diamond Age Atlas, which lost 80.8%.

Of the funds that agreed to publish their data, 22 have shown positive historical returns. 17 of them outpace the growth rates of the HFRI Fund Weighted Composite Index (which is about 3-7%).

Methodology

In the study, a Russian hedge fund refers to a fund with a Russian manager or headquarters in Russia. The list includes companies that have provided data on profitability for 12 months of 2014, confirmed by an independent administrator. The main parameters of the rating are profit based on the results of 2014, Sharpe ratio (an indicator that demonstrates the effectiveness of an investment strategy through the volatility of returns) and, in fact, portfolio volatility. The rating also reflects the historical performance and volatility of funds.

The rating base is made up of funds from the Bloomberg list, as well as funds that wished to cooperate directly with the Moscow Hedge Fund Managers Club and the National Association of Alternative Investment Market Participants (NAIMA) and have passed the due diligence procedure.

Petr Popov - Partner and Fund Manager at GRW Asset Management

Only six Russian hedge funds came out in positive territory at the end of the year. How do you assess these results and what are the prospects for the industry?

Despite the modest results, we continue to view the hedge fund industry as the most promising and profitable industry. Funds appear on the market that use the latest scientific achievements in their strategy. Young people who are not burdened with stereotypes come to management.

I think that in the coming years there will be funds that are ready, regardless of the market situation, to give double-digit returns at the end of the year on an ongoing basis.

According to Tiger 21, in 2014 hedge funds lost their former attractiveness to investors. The influx of new clients is slowing, and some large institutional clients are announcing their refusal to invest in hedge funds. Is something similar on the Russian market?

Certainly. This trend is even stronger in the Russian market. The reason for this is recent geopolitical events. This phenomenon was reflected in our foundation as well. We did not sign a number of contracts with potential clients in 2014. The reason was both the financial difficulties of some clients and the wariness of others, due to geopolitics.

What was your strategy? Did you have to correct it somehow?

Our fund has used a number of option strategies in the Russian market, as well as hedging strategies in the foreign exchange market. We followed medium-term market trends to generate profits regardless of market direction.

There was no need to adjust the strategy, on the contrary, at some moments its results even exceeded our expectations. This was due to a combination of profit on ruble instruments and an increase in the cost of hedging instruments at the end of the year due to the devaluation of the national currency.

What major mistakes did you manage to avoid and what do you consider your investment success?

The key mistake that we managed to avoid is that we did not abandon the currency risk hedge. I consider it a success that we are ready for the collapse of the ruble, which has provided us with a high profitability not only in ruble terms, but also in dollar terms.

What, in your opinion, is GRW's advantage over competitors within the framework of the chosen strategy?

We use our own author's developments related to the wave nature of the market movement. We are of the opinion that the markets are not as chaotic as they seem. As a result, it makes no difference to us whether the market rises or falls, stands or rushes with high volatility. In any case, we have a profitable strategy for every market mode.

Since the beginning of 2015, your fund has gone negative. How do you plan to end this year? What will you bet on in your strategy?

We predicted this minus, and it is associated with a sharp rise in the ruble against the dollar. We maintain a large dollar position that we do not intend to close.

By the end of the year, we plan to reach double-digit positive income. We have changed the strategy a little by adding short-term operations. This year we are betting on a weaker ruble and increased volatility in all markets.

Every year I review the rating of the best hedge funds HedgeCo.Net and collect my own rating of "Russian" hedge funds. But this year I will not make a rating of "Russian" hedge funds, since rating agencies in Russia do not provide information. And those funds for which I reviewed in 2015 from open sources either left the market or stopped publishing information to open sources.

The range of the best profitability of the rating in 2016 is much narrower than in 2015 and ranged from the minimum 66.45% to the maximum 145.59%. In 2015, the range was the minimum yield of 58.52% and the maximum yield of 332.01%. There is no dominance in any particular strategy either in 2015 or in 2016. In 2016, a fund with a Bitcoin strategy was included in the rating of the best funds. None of the 2015 leaders remained among the 2016 leaders.

The average profitability of the best funds for three years remained approximately the same as last year from 100% to 130%, which corresponds to 35-40% per annum. Sharpe ratio is more than 1. Assets under management from 6 to 17 million dollars.

As I wrote above, the most valuable funds are those that can consistently show stable returns above the market for several years. And if you look at the rating for 2016, you will find that most of the hedge funds from the rating are newcomers, i.e. funds with a history of no more than 3 years. At first, I concluded that newbies are lucky, but after looking at the ranking of the best hedge funds of 2015, I found that most of the funds there are over 5 years old. Let's see what happened to the leaders of 2015.

Traditionally, when making ratings, I make comparisons with our fund Eganov Asset Management Stocks & Derivatives Strategies and the S & P500 index benchmark. In 2016, the Eganov Asset Management Stock & Derivatives Strategies fund grew by 14.87%, and the S & P500 index by 9.54%. In comparison with the benchmark, we have shown a good result for the first time. But in order to enter the rating of the best hedge funds and attract the interests of investors to the fund, it is necessary to show a yield of 35-40% per annum for at least three years in a row and raise the Sharpe ratio to at least 1. Source

Such a financial structure as a hedge fund in the domestic economic sense is still a "dark horse", the activities of which are practically unknown to the general public.

Someone perceives them as a way to hedge their finances, someone prefers not to get involved at all, however, if there is a structure, then it has some functions.

A hedge fund is a private investment partnership, the participants of which intend to maximize income from the funds invested by investors in the conditions of existing risks, or, conversely, to reduce risks in order to achieve a set profitability. The essence of the fund's activities is to receive regular profit from investments of depositors' funds, regardless of the market situation. Funds tend to use both strategies, changing them as needed.

To achieve such goals, it is necessary to apply complex financial strategies, including, among other things, purchasing securities long or selling them short, leverage, and others. The range of tools used is quite diverse and depends on each specific situation.

Investors' funds are mainly invested in publicly traded securities, however, this category of investments is not limited, the source of future profit may be anything that can generate income:

• land;
• securities
• currency;
• commodity market and more.

At the same time, not every entrepreneur can use the properties of a hedge fund; only accredited investors or professional ones have access to the fund. Possessing at least $ 1 million in equity.

Hedge funds in Russia

The domestic market is not too supportive of such financial institutions. Their profitability is often negative or very low. Hedge funds in Russia, for the most part, are represented by OFBUs, a significant part of which were formed back in 2008, immediately after the collapse of the stock market boom. The total number of such organizations in Russia is about 60, which is an order of magnitude less than in the United States.

This is largely due to the imperfection of the legal framework. A significant part of the funds are registered offshore, which allows their participants to take advantage of the legislation of more liberal countries and protect their finances.

But even in such a difficult situation, there are funds headquartered in Russia that receive stable profits at a high level.

• One of the market leaders VR Global Offshore Fund, whose profit for the year was more than 30%. The company managed to achieve this level of profitability by blocking funds.
• In second place in terms of profitability is Diamond Age Atlas Fund who earned a little more 20% total profit.
• Equal to the previous fund, 20% profits and hedge fund Kvadrat (Kvadrat Black).
• Followed by Copperstone Alpha Fund, earning 19,1% arrived.
• In fourth place is Burnem Asset Management, with a yield of 17%.

In general, these funds hold in their "reserves" about 80 percent of the assets available in the Russian investment market, and half of these funds belong to the most profitable player.

• Another popular hedge fund in Russia is the fund Extranet Investment... True, its popularity is rather negative. In 2015, there were certain disruptions in the work of the fund, after which the personal accounts of the depositors were blocked. Today, the site has been restored, but, judging by the reviews, problems with payments remain.

In addition to the "oldies", young companies that adhere to active management strategies also appear on the domestic market. Having a short term of work, they cannot count on large investors who are ready to invest for a long period. On the other hand, they have a good intellectual resource, which, in conditions of fierce competition, will help them develop a correct, partly even aggressive strategy. The most fortunate among them will then become the leaders.

Hedge funds in the USA

America's hedge funds have traditionally taken the lead in the ranking of profitability. This is easily explained by a long history of work and a well-thought-out legislative framework.

The largest American funds manage funds in the amount of about $ 1.5 trillion, while influencing the political and legislative activities of the state.

• Glenview Capital Opportunity, showing order profitability 80 percent, in 2013, fund managers staked on health care reform and bought up medical companies.

Also, the five largest American players include:

• Millenium Partners L.P. controlling the amount of assets for 180 billion dollars and based in its activities on a combination of strategies;
• Citadel Global Fixed Income Master Fund Ltd. works with instruments with fixed profitability;
• Black River Firv Opportunity Master Fund Ltd. is engaged in the supply of agricultural products, food products, financial and industrial results in all countries;
• Bluecrest Capital International Master Fund Limited, having investments in the debt and stock markets of America and England;
• Adage Capital Partners L.P., based in Boston, prefers to trade stocks and bases its strategy on in-depth analysis of the true value of stocks.

Hedge funds in Europe

Although the European financial market is large, it is rather heterogeneous, and it can differ significantly in the western and eastern parts of the region. The largest and most profitable are British funds:

• ODEY EUROPEAN, profitability over 30%, assets worth more than $ 2 billion;
• LANSDOWNE DEVELOPED MARKETS, holds about 9 billion, profitability over 18% ;
• VR GLOBAL OFFSHORE, profitability over 30%, the amount of assets is about 2 billion;
• PELHAM LONG / SHORT, has assets in the amount of 3.2 billion, profitability 19% ;
• THE CHILDREN'S INVESTMENT$ 7.3 billion, profitability 30% .

There are also foundations with an international team, including representatives from the United States. For example, a hedge fund like Brevan howard, which includes five main founders, whose company operates on conservative investments, but at the same time receives stable results.

See also a video about hedge funds, their scheme of work and how they differ from mutual funds: