Finance: loans and deposits

Hedge fund

Posted on Nov 15, 2000 08:15:27 AM

Hedge fund Hedge fund – a private investment partnership that will use all possible instruments for absolute returns. Hedging means insurance against changes in prices of assets (securities and their derivatives). (Domestic value of the English word “hedge”, which are formed from stock terms – “hedge”.)
In the hedge fund is the general partner and investors. The main partner in the fund invests the initial capital and then attracts investors. In most cases it is also a trustee on the board. Bulk of the capital stock is usually formed at the expense of investors, but they do not participate directly in the management of the fund. In the U.S., the number of hedge fund investors is severely limited: there should be no more than 99.
Hedge fund can serve as a symbol of free, unrestricted business. Fund Manager – “the king, God and the commander: he has the right freely to choose which assets to invest in the fund, which markets operate, what strategy to use. The main objective – profitability regardless of market conditions.
The first hedge fund was introduced in 1949 in New York. It was created by Alfred Winslow Jones. The Fund is called – Jones Foundation. And the most famous public hedge fund managers – George Soros.

I read that investors are going to buy a car company Aston Martin, part of the plan to attract the necessary funds through Islamic bonds. I first encountered the securities division along religious lines. How do they differ from conventional bonds?

Bond – is, in essence, an IOU, which the company took the money and agrees to return them with interest. Sharia law prohibits the devout Muslims to engage in usury, that is to lend money at interest. To circumvent this prohibition, and were invented sukuk – Islamic bonds. Their owners are entitled to share in the company that issued such securities, its profit or loss. Income on these bonds is not guaranteed.
The market volume of Islamic bonds worth $ 70 billion expected by the end of 2007 it will grow to 100 billion bulk deals have performed in Dubai. On its intention to issue Islamic bonds to begin in April this year, said the Ministry of Finance of the UK.

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