what is a hedge fund?... (4 Viewers)

[Colin1883]

My understanding of it is...

A company that invests co-investors money and take a management fee for doing so whether the investment makes a loss or a profit.

My real question is...

If sisu take the management fee ie 10percent and then reinvest it in ccfc could they say this is part of the debt owed to them?

 

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[skybluesam66]

Absolutely

The debt - including that transferred from the purchase - will no doubt have been accruing interest also
PWKH also mentioned management fees (although i am not sure the accounts supported the theory)

so even if they acquired the club for nothing - the original balance sheet may have been

goodwill 30m
old debt (-30m)

they then write off the goodwill, and claim that is part of the losses ( albeit they have not really lost the money)

 

[Godiva]

My understanding of it is...

A company that invests co-investors money and take a management fee for doing so whether the investment makes a loss or a profit.

My real question is...

If sisu take the management fee ie 10percent and then reinvest it in ccfc could they say this is part of the debt owed to them?

Hedge funds are usually only paid a success fee. Something like 1-2% of the profit made. The fee is usually paid by the funds - not the company owned by the funds.
There have in previous financial reports been no indication that sisu have taken any fee from the club or the group.

 

[Godiva]

Absolutely

The debt - including that transferred from the purchase - will no doubt have been accruing interest also
PWKH also mentioned management fees (although i am not sure the accounts supported the theory)

so even if they acquired the club for nothing - the original balance sheet may have been

goodwill 30m
old debt (-30m)

they then write off the goodwill, and claim that is part of the losses ( albeit they have not really lost the money)

The loans provided by the funds draw no interest.

 

[Houchens Head]

I thought it was a savings account to build a pretty border around your garden? Get rid of the fencing. Start saving to build a hedge of conifers!

 

[Mr T - Sukka!]

Hedge funds are private investors setup to make money. Now why on earth they want to invest in football clubs is beyond me.

Everyone knows you lose money buying a football club.