A Hedge Fund is an investment fund, a company or a private partnership that use derivatives and/or is allowed to go short and/or uses significant leverage through borrowing. Its manager has a significant personal stake in the fund and is free to operate in a variety of markets and investment styles.

The "Hedge Fund" definition has come to incorporate any absolute return fund investing within the financial markets (stocks, bonds, commodities, currencies, derivatives, etc) and/or applying non-traditional portfolio management techniques including, but not restricted to, shorting, leveraging, arbitrage, swaps, etc.

Hedge funds can invest in any number of strategies and they are perhaps most readily identifiable by their structure, which is typically a limited partnership (the manager acting as the general partner and investors acting as the limited partners) with performance related fees, high minimum investment requirements and restrictions on types of investor, entry and exit periods.