As an investor, you'll have noticed that while hedge funds are a great alternative investment to diversify your portfolio and generate returns, finding detailed information about them isn't easy. Even in the digital age, many hedge funds are very cautious about the information they publicize. So even with all of the power of the internet at your fingertips, your first action when you're new to the hedge fund industry would be to find out everything you can about which hedge funds exist and are currently open to new investors.
Next, you'll want to gather as much information about their performance as possible. To many new investors, there are two easy ways of acquiring this information:
- Hedge fund lists
- SEC form 13F filings
The lists you're likely to find for free on the internet may seem like a good start, as they typically list hedge funds by country/city (New York, Singapore, etc.), the type of asset the fund invests in (futures, securities, stocks, etc.), total assets under management (AUM) or growth over a specific period of time. However, any third-party list which shows detailed financial information about a fund is usually based on freely accessible data or data gained directly from the company which manages the hedge fund. This makes such hedge fund listings unreliable as they are prone to errors as well as deliberate manipulation, as some firms may opt to strategically withhold certain data points that could be important for your investment decision. In other words, hedge fund listings on the internet offer you a sense of reliability, but you're usually better off not relying on third-party data.
13F filings can also give you helpful information about the hedge funds you're interested in. These filings are government-mandated for any hedge fund with more than $100,000,000 in AUM, so the information you get is often assumed to be reliable – it comes from the government, after all. However, since 13F forms need to be filed on a quarterly basis and don't require hedge fund managers to disclose information about their short positions and similar potentially crucial pieces of information, these forms are also unreliable as a basis for your tradings or investment decisions. They simply do not represent the current situation of the fund adequately.
In addition, the SEC does not require hedge funds under the aforementioned AUM threshold to file 13F forms, which means you'll likely focus on the big names like Citadel or BlackRock, completely missing some very promising smaller hedge fund investment opportunities, which might be exactly what you're looking for.
Ultimately, if you're looking for reliable data, you will need to go directly to the source – to the hedge fund firm itself – and find out which assets they invest in, what is their annualized volatility, which strategies they employ, etc. A few decades ago, this would have meant calling the hedge fund company in New York City or Hong Kong, setting up a meeting, and so on ...
CARL believes that internet-based listings are too unreliable, and contacting every single hedge fund company directly is too much work to be of any use to private investors. That's why the CARL app does all this work for you when it comes to the quants in our portfolio. Once you've set up an account and proven your status as an accredited investor, you'll find a plethora of information about each of the funds in our portfolio, including historical performance analyses, annualized volatility statistics, and so on.
Due to our focus on high-yield quantitative hedge funds, you won't find listings for funds like Bridgewater or Millennium Management on the CARL app. For new investors, in particular, that's a good thing. Many of these famous but old-school companies are highly insular, and they often require millions of dollars as a minimum investment. These firms effectively cut off a large number of eligible investors. With CARL, you only need a minimum investment of $20,000 to get full access to all of the quantitative hedge funds in our portfolio.
Even better, since quants typically outperform traditional hedge funds, you might be better off investing in our strategies which feature 15%+ targeted returns and no lock-up periods. That means maximum investment flexibility and control over your investments. The quants available via the CARL app have also undergone our due diligence process – another thing you won't have to do yourself when getting into the investment game.
From index futures to the reliable long/short equity model, our strategies offer you a wide variety of investment options without the need to collect and collate all of the relevant data yourself. Set up your CARL account today and say goodbye to unreliable hedge fund listings.