A hedge fund is defined as a collection of managed  investments that uses sophisticated investment methods such as gearing, long, short and derivative positions in the domestic and global marketplaces with the objective of producing high returns (either in a total sense or more than a particular sector benchmark).

A hedge fund is a private investment partnership, in the form of a corporation, that is open to a limited number of investors. The corporation almost always mandates a substantial minimum investment. Opportunities within hedge funds can be illiquid because they frequently demand investors maintain their capital in the fund for a minimum of twelve months.