Offering Hedge Funds

As Director/Investments with The CR Wealth Management Group of Stifel, David Stone helps corporate and individual clients pursue their financial goals. Based in Stifel’s offices in New York, David offers wealth management strategies that incorporate various products, such as hedge funds.

A form of alternative investment, hedge funds pool funds from several investors in an effort to generate positive active returns for all investors in the pool. Hedge funds often make use of derivatives (which are securities that have a price dependent on at least one underlying asset) that may be aggressively managed with the aim of creating high returns, usually above those specified in a market benchmark.

Hedge funds take numerous forms, but most strive to identify opportunities within a certain market. Typically, investments in a hedge fund are considered illiquid, which means investors may not withdraw their money from the fund for a certain time period (often referred to as a lock-up period). At the end of the lock-up period, investors may withdraw funds according to the terms of the hedge fund.

Investors should be aware that hedge funds often engage in leverage, short-selling, arbitrage, hedging, derivatives, and other speculative investment practices that may increase investment loss. Hedge funds can be highly illiquid, are not required to provide periodic pricing or valuation information to investors, and often charge high fees that can erode performance. Additionally, they may involve complex tax structures and delays in distributing tax information. While hedge funds may appear similar to mutual funds, they are not necessarily subject to the same regulatory requirements as mutual funds.

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As Director/Investments with The CR Wealth Management Group, David Stone oversees a wide range of financial management activities, with an emphasis on providing clients a secure income in their retirement years. David Stone and the advisors at Stifel provide a full host of third-party independent money management strategies, including private equity, exchange-traded funds (ETFs), and hedge funds. While hedge funds lack the liquidity of mutual funds, they offer Stifel clients a broader range of securities in which to invest. In addition to stocks, bonds, real estate, and other traditional investments, hedge funds enable the holding of futures, options, and other types of derivatives. Article provided by David Stone, Director/Investments with Stifel, Nicolaus & Company, Incorporated, member SIPC and New York Stock Exchange, who can be contacted in the New York, New York office at (212) 328-1000. Investors should be aware that hedge funds often engage in leverage, short-selling, a

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