Here are three popular ways to participate. Investing directly with a hedge fund manager requires a high level of net worth and liquidity and involves a complex evaluation process. Therefore, hedge fund databases are incomplete. Even then, many hedge funds remain closed to new investors. Use a consultant.
Consultants function as financial matchmakers between investors and appropriate hedge fund managers.
For a fee, they can offer screening techniques to evaluate managers' strategy and performance. Invest through a third-party firm. A method that has gained in popularity recently is investing through one of a handful of Wall Street firms now offering hedge fund vehicles. These investments combine the assets of a number of clients and turn them over to a manager or group of managers. What the Wall Street firms bring to the table is the ability to tap long-standing relationships with prominent fund managers and to add professional due diligence and third party asset allocation expertise.