How do you sell a hedge fund

How can retail investors invest in hedge funds?

Question: A friend recommended that I invest my money in hedge funds, as they can generate a very high return. The question I asked my bank advisor showed that private investors in Germany obviously have no access to hedge funds at all. Is that correct? And what options are there to get into such funds through other countries?

Thomas B. from Gütersloh


Answer: Since the Investment Modernization Act came into force, it has been possible to sell so-called “umbrella hedge funds” in Germany. These consist of a large number of individual such funds and thus ensure the broadest possible risk diversification. The sale of individual hedge funds, on the other hand, is not permitted in this country. In this way, private investors are to be protected from the special risks of this type of investment.

If you still want to invest your money in single hedge funds, there is the option of buying shares in such companies on the London Stock Exchange, for example. There you will find, for example, Man Group shares. With $ 54 billion in assets, it is the world's largest investment company of its kind, followed by RAB Capital. Further hedge funds are planned to go public in London. Entry into listed hedge funds has the great advantage that the transparency of these companies is significantly higher than that of those who only work in secret, without disclosing their strategies and the extent of their leverage. Before you actually invest your money in hedge funds, however, you should first carry out a detailed risk analysis and check whether such a speculative investment fits your investment goals and structure at all.

Jella Benner-Heinacher