CHAPTER 19 Hedge, Venture Capital, and Private Equity Funds
WHAT YOU WILL LEARN IN THIS CHAPTER
- What is meant by hedge funds, venture capital funds, and private equity funds.
- Why these are deemed to be alternative and risky investments.
- Why these funds are typically organized as limited partnerships.
- How hedge funds go about trying to achieve extraordinary returns on marketable instruments.
- How venture capital funds assist new and promising businesses, especially in the tech sector.
- How private equity funds seek to profit from restructuring underperforming established businesses
- How these funds seek greater returns through borrowed funds and leverage.
- How each of these funds creates economic value and enhances overall economic performance.
- How these funds are involved in the monetary policy process.
BACKGROUND
Ever wonder if highly successful firms, such as Apple, benefited from financing and other assistance as they were getting their start? Or what happens to established firms that took the wrong business path and fell into a ditch? Or what fosters nearly instantaneous adjustments to stock and other financial asset prices on the release of news? In such cases, an alternative investment fund likely was involved—a venture capital, private equity, or hedge fund.
No doubt you run across the terms hedge funds, private equity funds, and venture capital funds all the time. These funds are among the most mysterious and controversial financial institutions around the globe. Hedge ...
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