Kingdom Ridge Capital is a hedge fund. When many think of hedge funds, they think of traders sitting on a trading floor or maybe inside a large office looking at a bunch of stock charts and trading a large number of stocks. To varying degrees, this image is probably true of some hedge funds. However, that is not the way Kingdom Ridge operates.
Hedge funds are alternative investments that use pooled funds for the purpose of earning active returns; the hedge fund may use a variety of strategies to achieve this goal. Although similar to mutual funds as investments are pooled and managed by professionals, hedge funds offer much more flexibility in investment strategies. Some popular types of hedge funds are emerging markets, distressed securities, global macro, and hedged equity.
When Kingdom Ridge Capital buys a stock, they are thinking about how the next six to twelve months are likely to unfold for the company. Kingdom Ridge is not a trading shop. In fact, the firm does not have a dedicated trader. There is no need for such a full time position inside Kingdom Ridge because they are not a trading shop. Many days during the year Kingdom Ridge Capital doesn’t do a single trade. This is just one way they are different from the typical perception of a hedge fund.