Investment Management

Capital Call: A capital call (otherwise known as a draw down) is the legal right of an investment firm or an insurance firm to demand a portion of the money promised to it by an investor.

Carried Interest: Carried interest is a share of profits that the general partners of private equity and hedge funds receive as compensation, despite not contributing any initial funds. This method of compensation seeks to motivate the general partner to work toward improving the fund’s performance.

Drawdown: A drawdown is the peak-to-trough decline during a specific record period of an investment, fund or commodity. A drawdown is usually quoted as the percentage between the peak and the trough.

Hedge Fund: A hedge fund is an investment partnership which employs aggressive leverage to multiply gains (or losses) from fluctuations in the prices of financial instruments (bonds, notes, securities). Hedge funds are restricted under US law to less than 100 investors or to have only qualified investors.

Private equity: Private equity represents a class of investors, their funds, and their subsequent investments, which are made in private companies or in public companies with the goal of taking them private.