The Role of Hedge Funds in The Modern Economy

Abuishkireh Mohammed Wasfi AbdalJaleel (2023) The Role of Hedge Funds in The Modern Economy. Faculty of Finance and Accountancy.

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Abstract

TheHedge Fund industry has always had an aura of mystique around it. Few peopleknow about these funds and their crucialrole in the financialmarkets. They are the ultimate marketmakers, Alpha generators, and liquidity providers in the capitalisteconomy's history. The development ofthese funds affects not only the asset management industry but everyone around theworld.Thisstudy aims to understand the Hedge Fund industry and acquire further insightsinto where it’s now and where it’sheaded in the future. The research aimed to analyze the industry structure, compensation fees, and contributions to thedevelopment of the financial markets.Henceforth, the research discusses at length the trend of ESG considerations asit’s now widely believed to be thefuture of the industry. The researcher will begin by reviewing academic books, journals, newspaperarticles, and corporate business reports written by industry specialists. The research is a qualitative studyencompassing three interviews with a HedgeFund manager and two Bank CEOs in an attempt to evaluate the current situationof the industry, the extent ofinfluence the ESG considerations have had on it, and explore the different possible ways of integratingthese considerations in the investment selection process in the industry. The secondary purpose of the study is topresent the contemporary challenges faced by theindustry in this decade.Theinterviews conducted and the published academic papers helped to investigatethe research goals, it revealed thatthe role of Hedge Funds in the past was a market stabilizing force by providing liquidity, advisingboards in difficult financial situations “Activists” and short-selling underperforming enterprises. However, it wasalso discovered during the researchthat the industry is undergoing a major transformation and adaptation periodinto ESG based investing with a focuson the United Nations Principles for Responsible Investment (PRI).

Institution

Budapest Business University

Kar

Faculty of Finance and Accountancy

Department

Pénzügy Tanszék

Tudományterület/tudományág

UNSPECIFIED

Szak

Pénzügy és Számvitel

Item Type:	Thesis (UNSPECIFIED)
Uncontrolled Keywords:	Activism, Asset management, ESG, hedge fund, investment analysis, UN PRI
SWORD Depositor:	Archive User
Depositing User:	Archive User
Date Deposited:	2023. Oct. 16. 13:03
Last Modified:	2023. Oct. 16. 13:03

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