As with any other type of investments, dealing with hedge funds includes certain amount of risk.

Activities of hedge funds are being significantly less governed than those of traditional funds. Obtaining and summarizing information about hedge fund market is a more complicated task.

The specific feature of the hedge funds is lower liquidity in comparison to open ended mutual fund; you can withdraw invested funds only in certain time intervals, for instance, once a month. However, this makes the amount of invested funds more predictable for the managers, and allows them to earn more income using various short-term instruments.