Hedge funds

When Governor Romney was running for president the subject of hedge funds was in the news since this is how Romney made his millions. A group of individuals forms a limited partnership and they select companies to invest in. Normally these companies are new and cannot get financing through the normal channels as the risk is too great for most banks. Since hedge funds to not sell stock to the general public they are not covered by investment laws. It is just their money and they are allowed to invest it without any government oversight. Since these investments carry high risk the money is sometimes referred to as venture capital. It is estimated that 3 out of 4 of these investments loss money so when they hit a winner it has to be big to make up for the losses. There are thousands of companies operating today that would not be there if it were not for hedge funds. These funds are an integral part of today’s business world yet during the election they were exposed in the press as some evil capitalistic scheme to take advantage of people. There are many of these funds and for sure some act in unscrupulous ways but many well-known companies are in business today because of venture capital