Principle objective of this article is to Define Hedge Fund, in financial management point of view. The term hedge fund is put on funds that do not actually ‘hedge’ their risks but instead increase it because they anticipate to generate a higher return. A hedge fund is a professionally managed portfolio of investments which is typically open to a small range of sophisticated or perhaps wealthy investors. As the particular name suggests, these cash hedge their risks by offsetting potential losses by hedging their investments using different approaches, the most in-demand one being short selling.