Executive summary

• Hedge Funds use trading strategies that aim to profit from market imperfections - The general idea is that Hedge Funds are managed by smart traders that focus on highly specialised strategies to make profits from market imperfections in ways that are largely unrelated to broad market moves. The traders then take 20% or more of those profits in fees before passing the balance back to investors. It’s all good when profits are plentiful.

• Twenty years of plenty followed by 20 years of drought - Hedge Funds have been around in various forms since the 1980s and we have good...