Alternative Investment Fund and Hedge Fund

The concept of an alternative investment fund involves various types of investment structures, including hedge funds, real estate funds, and venture capital funds.

An alternative investment fund is a financial instrument that allows you to:

• Attract investments from a limited number of people;
• Use ample opportunities for diversifying the investment portfolio;
• Invest in different types of assets;
• Carry out collective investments in specific projects to generate income;
• Apply various investment strategies.

AIFs provide an opportunity to increase capital by investing in various projects within EU countries.

Difference between funds

A hedge fund is a particular type of AIF that:

• Is practically not limited by regulatory requirements;
• Is a private fund available to a limited number of people;
• A professional manager manages it;
• Focuses on obtaining maximum income with given risks;
• Differs in a unique structure of remuneration for asset management and performance.

Unlike other alternative funds (investment funds vs. hedge funds), hedge funds can use a broader range of investment strategies, including fairly aggressive ones, short selling, leverage, and more. The lack of regulation gives managers the freedom of action but can also create additional risks.