But, remember most hedge funds have greater investment flexibility than regulated investment advisors. They can profit from leverage in up markets and varying forms of short selling in declining markets, whereas most mutual fund companies can't use leverage and their only defensive option is to raise cash. Size matters as well. The largest mutual fund dwarfs the largest hedge fund. In today's volatile markets, the small and swift often have a distinct edge over the big and unwieldy.
Incentive based compensation is a powerful lure for investment talent.
Twenty percent of the profits can be a very good deal even relative to a big Wall Street salary. We do this through a variety of value added products in the high net worth, institutional, and retail marketplace using fundamental research. In the alternative investment marketplace, we have a family of absolute return products with dedicated teams, looking for investment opportunities, based on the Gabelli philosophy of investing In today's volatile markets, we believe such investment vehicles provide our clients with proven absolute returns that can meet their investment goals. Our first absolute return fund, our merger arbitrage fund, was introduced to our clients in 1985 with great success Another partnership was launched in 1986 focusing on US special situations, followed by two offshore funds in 1989. Building on the firm's strengths, new hedge funds have been added aver the past several years.