Hedge Hunters: Understanding Aggressive Hedge Fund Managers

Close-up of hedge hunter's hands writing down stock market trends.

In the investment world, a hedge hunter is a hedge fund manager with a reputation for aggressive and successful investment tactics. Hedge funds are pools of capital similar to mutual funds. However, they are subject to less regulation and have fewer disclosure requirements. An individual wishing to invest in a hedge fund usually must be an "accredited investor," meaning he meets high income or asset requirements. The hedge hunter offers such investors a chance for high returns, although with greater risk than mutual funds entail.

High Stakes Players

Author Katherine Burton first used the phrase "hedge hunter" in her 2007 book, "Hedge Hunters: Hedge Fund Masters on the Rewards, the Risks, and the Reckoning," to describe the successful and aggressive hedge fund managers she profiled. Hedge hunters are risk-takers who leverage portfolios by borrowing funds, selling stocks short, investing in options and using other strategies to maximize profits. This approach is in sharp contrast to the mutual fund manager who builds a highly diversified portfolio of securities with the goal of producing good returns while minimizing risk. Being a hedge hunter is financially risky, and most don't stay in the industry for more than a few years. Critics question their single-minded pursuit of profit maximization, but the hedge hunters tend to see themselves as acting in their clients' best interests.