The area around Boston may be the best suited to hedge funds of any city in the United States. Its constant access to Harvard, Yale, and MIT graduates ensure that the innovation and talent required to keep a hedge fund alive are always available.
Hedge funds are critical components of the startup ecosystem. We’ve compiled a list of the best Boston Hedge Funds. We attempted to select a diverse range of investors from various niches.
This list highlights investors with outstanding track records, industry experience, and a unique understanding of the ecosystem.
Table of contents
- What is Hedge Funds?
- How Does Hedge Funds Work?
- Pros And Cons of Hedge Funds
- 15 Best & Most Active Boston Hedge Funds
- #1. Baupost Group
- #2. Turan Corporation
- #3. Windham Capital Management
- #4. Numeric Capital
- #5. Adage Capital Management
- #6. Bain Capital
- #7. Domeyard
- #8. Cormorant Asset Management
- #9. Atreides Management, LP
- #10. North Run Capital Partners
- #11. Triathlon Fund Management
- #12. ShawSpring Partners
- #13. Monashee Investment Management
- #14. PAR Capital Management
- #15. Granite Point Capital
- Frequently Asked Questions
What is Hedge Funds?
A hedge fund is a private investment that pools money from several high-net-worth individuals and large corporations to maximize returns while minimizing risk.
To hedge against market volatility, the fund may make two investments that react in opposite directions. If one investment performs well, the other loses money, reducing the overall risk to investors.
The term “hedge” comes because different market strategies can help offset risk or “hedge” the fund against large market downturns.
How Does Hedge Funds Work?
Hedge funds can earn money in a variety of ways. They can invest domestically and internationally and use virtually any investment strategy to generate active returns. For example, the fund may borrow money to increase returns (a practice known as leveraging), make highly concentrated bets, or engage in aggressive short positions.
However, these investment vehicles are risky due to their flexibility despite their name. “There is no transparency in hedge funds, and most of the time, managers can do whatever they want inside the fund,” says Meghan Railey, a certified financial planner and Optas Capital co-founder/chief financial officer. “As a result, they can place large bets on where the market is headed, and they could be very wrong.”
Because of the increased risk, only accredited investors — those deemed sophisticated enough to handle potential risks — are usually permitted to invest in this fund. To qualify as an accredited investor, you must have earned at least $200,000 in the previous two years ($300,000 for married couples) or have a net worth of more than $1 million.
Pros And Cons of Hedge Funds
Remember the advantages and disadvantages of including such funds in your portfolio when investing in hedge funds.
You can easily get into a bad hedge fund investment if you don’t understand that there may be many unstable and unpredictable events beyond the seemingly sound risk management tools and statistical analysis.
On the other hand, if you’re equally uneducated, you might miss out on huge positive investment opportunities by overlooking the benefits of a hedge fund investment. Some Pros and Cons of hedge funds are;
Advantages of Hedge Funds
1. Aggressive Investment Strategies
One advantage of hedge funds is that investors use aggressive strategies to achieve a high return. Some aggressive investment strategies, for example, that can operate on both domestic and international financial markets are known as leverage, derivative, and long and short.
As an illustration of a leverage strategy, investors will borrow and trade money in addition to the capital they gain.
2. Significant Profits
Another advantage of using hedge funds in your portfolio is the large amount of money that is easily made. The goal of hedge funds is to achieve a high return regardless of market fluctuations at any given time.
Disadvantages of Hedge Funds
1. Expensive Investment Fees
The often high fees required to invest in hedge funds are a major disadvantage of hedge funds and a source of criticism. Hedge fund investors, for example, typically charge a performance fee in addition to a management fee.
Leverage is an investment metric that is frequently overlooked as the primary cause of hedge funds incurring large losses.
Put, as leverage increases, any negative investment returns are highly magnified, causing the hedge fund to liquidate its assets at a loss. Leverage is usually a major reason why so many hedge funds fail.
15 Best & Most Active Boston Hedge Funds
Here is the list of the 15 best and most active Boston hedge funds
#1. Baupost Group
Seth Klarman’s Baupost Group is one of the best Boston hedge funds, with $26.4 billion in assets under management and a value investing philosophy.
The hedge fund focuses on risk management and avoids long shots, a strategy that led to underperformance in 2014.
But Klarman won’t mind. His goal is to provide investors with high returns at a low-risk premium. He’s been doing it for twenty years, and it’s helped him cement his position as the most important manager.
Check out: How Do Hedge Funds Make Money
#2. Turan Corporation
Turan Corporation was initially and primarily a private investor in sovereign debt. However, beginning with an investment in Turkish bonds more than twenty years ago, the company invented a market for the debt of emerging countries.
The most recent event that brought widespread attention to the company was its role in the legal dispute that led to Argentina’s declaration of bankruptcy in 2014. The Turan Corporation is one of the best Boston hedge funds.
#3. Windham Capital Management
Windham Capital Management is one of the best Boston hedge funds focusing on risk management above all else. It has been operating since 1988, but only in 2012 did it surpass the $1 billion asset management threshold.
The firm won the Money Management Intelligence Emerging Manager of the Year award in 2013, but it isn’t letting that get to its head. The Windham Capital Management is one of the most active Boston hedge funds.
#4. Numeric Capital
Numeric Capital, founded in 1989, is one of the oldest quantitative hedge funds. It has $16.7 billion in assets under management.
The Man group, known for its quantitative potency, acquired the company in 2014 but still operates relatively independently.
Offering a variety of strategies to investors, the firm is a careful portfolio constructor and one of the most active Boston hedge funds today.
Have you seen: 10 Best Vanguard Bond Funds in 2022
#5. Adage Capital Management
Adage Capital Management is one of the most exciting names in the hedge fund industry, with investments across the equity markets. The hedge fund currently manages approximately $25 billion in assets, making it one of the largest overall players in the Boston area.
It is best known for winning a $1 billion bet on Puma Biotechnology. Following a successful medical trial, the hedge fund could reap a large profit from the business.
Since that remarkable rise, the company’s stock price has remained relatively stable. The Adage Capital Management is one of the best Boston Hedge Funds right now.
#6. Bain Capital
Few people know that Bain, best known for its private equity operations and association with Mitt Romney, is also involved in the hedge fund industry.
Since 2006, the company has been a significant player in global hedge funds, offering a variety of strategies and funds through its hedge fund affiliate Brookside Capital, which has approximately $11 billion in assets under management. The Bian Capital is one of the best Boston hedge funds.
You should see: 20 Best-Paid Hedge Fund Managers In 2022
Domeyard LP is a Boston-based hedge fund, commodity trading advisor (CTA), and commodity pool operator (CPO).
A team from MIT (“dome”) and Harvard (“yard”) founded the company in 2013, placing their first trade from a dorm room and installing their first servers in a bedroom closet.
They have since gone on to make markets in some of the world’s most active instruments, trading billions of dollars in daily volume across equity indices, interest rates, foreign exchange, commodities, and metals. The Domeyard is among the most active Boston hedge funds.
Today, their investors include Renaissance Technologies, First Round Capital, Acadian Asset Management, and institutions such as SoftBank Group and Renren, Inc.
#8. Cormorant Asset Management
Cormorant Asset Management is a sponsor of pooled investment vehicles and is an employee-owned hedge fund. The company offers its services to investment vehicles.
Cormorant Asset Management is one of the best Boston hedge funds.
#9. Atreides Management, LP
Atreides Management, LP provides both public and private technology and consumer companies with a long-term perspective by utilizing a strategy known as “crossover.”
It is not only one of the most active Boston hedge funds but also one of the best Boston hedge funds.
#10. North Run Capital Partners
North Run Capital Partners, LP is a hedge fund sponsor that is privately held. The firm invests in the United States public equity markets. Its headquarters is one of the best Boston hedge funds.
North Run Capital, LP acts as a financial advisor. The company usually provides investment management and advisory services to pooled investment vehicles. North Run Capital Partners is one of the most active Boston hedge funds.
#11. Triathlon Fund Management
Triathlon Fund Management, a hedge fund sponsor, primarily works with pooled investment vehicles. They provide clients with a small firm’s personalized, detail-oriented attention and the expertise and knowledge of a large firm.
They provide personalized service to a limited number of clients, allowing them to develop relationships based on mutual trust and confidence.
Throughout the relationship, all investment strategies and risks are well thought out and communicated to their clients as they build and preserve wealth. Triathlon Fund Management is one of the best Boston hedge funds.
#12. ShawSpring Partners
ShawSpring employs a single, long-term investment strategy to generate high absolute returns while outperforming market indices. This company located in Boston, opened up in 2014.
They manage capital for a group of global institutions such as university and hospital endowments, charitable foundations, family investment offices, and high-net-worth individuals.
ShawSpring has its registration with the Securities and Exchange Commission in the United States and is one of the most active Boston hedge funds.
#13. Monashee Investment Management
Monashee Investment Management founded in 2011 by Gerald Coughlan and Tom Wynn, is a financial services firm that specializes in investment advice. They have its headquarters in Boston and are one of the best Boston hedge funds.
Read also: What is an allowance for loan losses?
#14. PAR Capital Management
PAR Capital Management Inc is one of the best Boston hedge funds. The company usually provides investment management services to high-net-worth individuals, family offices, trust programs, endowments and foundations, and private investment funds.
Their philosophy is based on the belief that long-term investment success can be easily achieved.
#15. Granite Point Capital
Granite Point Capital Management, L.P. offers investment advice. The firm provides investment management services. Granite Point Capital Management is based in the United States and is one of the best Boston hedge funds.
You should see: What Increases Your Total Loan Balance?
The hedge fund industry is rapidly evolving due to numerous influences and demands. Markets are more volatile, and it is more difficult to invest.
We hope that the list of the best and most active Boston hedge funds will serve as a good guide in your investing journey.
Frequently Asked Questions
New York is home to more than half of all US-based funds of hedge funds, with a combined AUM of fund managers headquartered in the state totaling $310 billion.
Private equity firms in Boston number over 100 and vary greatly in terms of investment strategy, industry focus, geographic focus, and size.
Yes, you could start with much less capital, go through a hedge fund incubator, or target only high-net-worth individuals. However, if you begin with, say, $5 million, you will not be able to pay yourself, hire others, or even cover administrative costs.
Private equity and hedge funds are typically structured as pass-through entities, allowing them to pass on their entire tax burden to their investors or limited partners.
Hedge fund investors seek an investment unrelated to the rest of their holdings. If the stock market falls in value, hedge fund investments may rise. In other words, hedge funds are usually used by investors to diversify their portfolios.
- investoravailable.com – Best & most active Boston hedge funds.
- hedgethink.com – Boston hedge funds.
- ushedgefunds.com – Massachusetts Hedge funds.
- wikipedia.org – Hedge funds.
- How Do Hedge Funds Make Money
- 10 Best Vanguard Bond Funds in 2022
- 20 Best-Paid Hedge Fund Managers In 2022
- How to Invest in Hedge Fund in 2022 | Sure Things You Must know
- Citi Personal Wealth Management Review | 2022
- What is an allowance for loan losses?
- What Increases Your Total Loan Balance?
- Are Personal Loans Tax Deductible?
- What is a signature loan and how does it work?