Hedge Fund Offerings (HFOs)

Hedge Fund Offerings (HFOs) may be an effective way to access a variety of hedge fund strategies for a relatively modest investment. A registered HFO seeks to blend various strategies and asset classes. They are designed to create more stable, long-term investment returns than those of any individual hedge fund.

In general, HFOs seek to deliver more consistent returns than stock portfolios, mutual funds or individual hedge funds. At the same time, they try to provide access to a broad range of investment styles, strategies and hedge fund managers.

It is important to understand the differences between hedge fund strategies because all hedge funds are not the same. Investment returns, volatility and risk may vary among hedge fund strategies. Hedge fund investing involves a variety of risks and is only suitable for accredited investors who can afford a loss of all, or a portion, of their investment.

Regulations require that HFO investing is limited to accredited investors. This includes:

  • Investors with $1 million net worth (excluding home, auto and other personal possessions); or
  • Investors who have had a $200,000 individual income or $300,000 joint income for the past two years (and who have reasonable expectations to maintain that income level)
How can a HFO help you?

HFOs attempt to reduce risk by incorporating a diverse range of hedge fund strategies into a single investment vehicle similar to a mutual fund. Diversification can be an effective way to reduce risk in your portfolio by allocating assets among various investments and investment managers. Compared with investing in a single investment strategy, an HFO may help reduce overall investment risk while providing access to various market opportunities.

Diversification does not guarantee against loss or guarantee a profit. It is strictly a method to help manage risk.

Ameriprise Financial is a distributor of Hedge Fund Offerings and does not participate in selecting, managing or selling other investments, except as described in the prospectus or private placement memorandum. Hedge Fund Offerings are limited to investors who meet the financial suitability standards as specified in the prospectus or private placement memorandum, in addition to the Ameriprise Financial minimum suitability requirements.

The applicable Hedge Fund Offerings' prospectus or private placement memorandum will contain a listing of the various risks related to the investment and its operations. You should read the prospectus and/or private placement memorandum carefully to determine whether an investment is suitable for you in light of, among other things, your financial situation, need for liquidity, tax situation and other investments.

Investing in Hedge Fund Offerings involves a variety of significant risks and is only suitable for accredited investors who can afford a loss of all or a portion of their investment. This does not constitute an offer to sell or solicitation to invest in any Hedge Fund Offering.

Investment products are not federally or FDIC-insured, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.