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With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

Hedge Fund SWOT Analysis

 

Strengths

 

Hedge funds profit in both bull and bear markets. This is due to the fact that a hedge fund can take either long or short positions on all traded security. As such, these businesses are able to remain profitable in any economic climate given their unique nature. Additionally, the automation of trading has allowed hedge fund managers to develop strategies that can be replicated several thousands of times in order to produce small but consistent profits. As artificial intelligence expands (concurrent to the speed of communications), the demand for the hedge fund asset class is expected to increase. This is even more true in today's world where investments can be made across the globe very quickly. The revenues generated by hedge funds are substantial. Generally, a hedge find manager will charge 1% of assets under management coupled with a 20% share of all profits generated from trading and investments.

 

Weaknesses

 

These companies are subject to a tremendous number of rules and regulations. The number of laws pertaining to the operations of hedge funds has increased substantially since the end of the economic crisis that started in 2008 and ended in 2011. The other issue faced by hedge funds is the continued and ongoing competition from other pooled investment groups. There are currently more than 10,000 registered hedge funds in the United States.


Opportunities

 

Much like other pooled investment funds, the primary way that a hedge fund expands is by soliciting additional capital from investors. Once an initial fund is launched, it is relatively easy to develop subsequent funds that cater to existing investors and new investors. Additionally, the continued integration of new trading platforms and technology is imperative for a hedge for to expand and remain competitive in the market.

 

Threats

 

As with most investment firms, ongoing regulations increase the expense associated with these companies. This is an ongoing issue faced by financial firms, and it will continue perpetually as the environment in which hedge funds operate changes. One of the final issues faced by hedge funds is that as new competitors enter the market, the fees that these companies are charging to their investors have declined slightly. However, this is a minimal threat for companies in this market.

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