According to Barclay Hedge, a hedge fund is an alternative investment vehicle available only

to sophisticated investors, such as institutions and individuals with significant assets.

On the other hand, Hedge Fund Marketing defines that A hedge fund is an alternative
investment that is designed to protect investment portfolios from market uncertainty, while
generating positive returns in both up and down markets. Throughout time investors have
looked for ways to maximize profits while minimizing risk. The issue of shielding an
investment from market risk is attempted with alternative investments that try to mitigate loss
and preserve capital. These alternative investments are called hedge funds. Perhaps the
definition of a hedge fund is an alternative investment portfolio used by a group looking for
above market returns.
Hedge fund is a private investment partnership and funds pool that uses varied and complex
proprietary strategies and invests or trades in complex products, including listed and unlisted
derivatives.
Put simply, a hedge fund is a pool of money that takes both short and long positions, buys
and sells equities, initiates arbitrage, and trades bonds, currencies, convertible securities,
commodities and derivative products to generate returns at reduced risk. As the name
suggests, the fund tries to hedge risks to investor’s capital against market volatility by
employing alternative investment approaches.
According to Capital.com Hedge funds are collective investment vehicles typically restricted
to experienced investors and pursuing unconventional investment strategies, sometimes with
borrowed money. The name derives from the fact that the original funds 'hedged' their
positions to reduce risk, but modern funds do not necessarily do this. A number of features
define a hedge fund:

• It will be private, open only to a limited number of wealthy and experienced investors
• The fees charged by those running the fund will be high by outside standards
• The fund will seek market-beating returns from unconventional investment strategies
• As a professionals-only fund, it will be more lightly regulated
Simply put, a hedge fund is nothing more than an investment company that invests its clients'
money in alternative investments to either beat the market or provide a hedge against
unforeseen market changes.