7 Untold Hedge Fund Secrets: Essential Tips to Protect Your Capital from Drawdowns and Hidden Fees
Hedge funds remain a cornerstone for institutional and high-net-worth investors, offering differentiated returns and reduced correlation to traditional markets. Yet their complexity, leverage, and regulatory opacity demand rigorous due diligence. Investors must look beyond performance metrics to scrutinize operational, structural, and risk factors.
Capital protection hinges on seven critical actions: dual-layer operational due diligence to mitigate fraud risk, fee alignment clauses like high-water marks, and stress-testing liquidity provisions to avoid redemption traps. The absence of these safeguards exposes investors to hidden risks in an already opaque asset class.