A sovereign wealth fund is run by people in a foreign country that want to buy up assets in the U.S. and make a profit. A hedge fund is run by adults that, when they were kids, breathed heavy and creeped out the girls in class. Most hedge fund managers are just trying to get back at society by slowly tearing it apart, bit by bit. That's the difference.
Permalink | Report

A hedge fund is a company (typically privately held) that takes money from investors and invests it in the market. Hedge funds have a great amount of flexibility on how they can invest the money. They can invest in stocks, bonds, mutual funds like other investment groups can, but they can also short sell, buy on margin, etc. Because of this advanced level of investment, most hedge funds have very large minimum investment requirements for individual investors.

Sovereign wealth funds (SWFs) are the same type of thing as hedge funds, but they are run by foreign governments. The largest SWF is the Abu Dhabi Investment Authority, run out of the United Arab Emirates. You can read more about it at http://en.wikipedia.org/wiki/Abu_Dhabi_Investment_Authority but typical estimates have the ADIA running over half a trillion dollars of the UAE's money.
Permalink | Report