Hedge Funds – Essential Terms


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Hedge Funds – Essential Terms

Since graduating from Columbia Business School in 1967, Arthur J. Samberg has amassed more than 25 years of experience in investment and finance. Art Samberg gives back to schools and charities such as Morgan Stanley Children’s Hospital, where he serves as a trustee. At present, Art Samberg is the owner of Hawkes Financial, LLC, his family office.

Hedge fund managers require a vast network of contacts and an equally deep knowledge of hedge fund markets and terms. For example, the 100-holder rule states that a fund may avoid registration as an investment company if it is not owned by more than 100 investors and not offering its securities in the public market. In some instances, a single investor counts as more than one beneficial owner under both the 100-holder rule as well as the 3C1 fund.

Most hedge funds are private, which requires investors to understand the definition of an accredited investor. Simply put, an accredited investor is an individual or entity allowed to buy securities in a private placement, itself defined as a security immune to the requirement of registration with the U.S. Securities and Exchange Commission (SEC). A possible exception is the integration rule, which says that private offerings may be integrated with offerings registered with the SEC.


Investment Tips That Lead New Investors Astray

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Arthur J. Samberg graduated from Columbia Business School in 1967. Appreciative of his time there, Art Samberg has donated over $35 million to help the school create new programs. Presently, Art Samberg is the owner of Hawkes Financial, LLC, his family office. He founded his first fund in 1986.

Neophyte investors tend to get the same advice, which amounts to investing safely. But certain investments only appear safe. For instance, experts tell beginners to invest in well-run growth companies, but small-cap and value companies stand a better chance of producing higher gains. High-quality growth companies are popular because they are known, which means they cost significantly more to acquire than small-cap and value companies, putting them out of reach for the majority of new investors.

Another long-standing belief in investing is that holding an investment for longer periods of time results in increasingly greater odds of success. The opposite is, in fact, true. The longer an investor holds onto a company or diversified portfolio, the higher the chance of a catastrophic event that ruins the investment. Some investors are too stubborn to let go on an investment and will let it ruin them.