Are hedge funds suitable for retail investors? There are many different reasons why humanity saves and invests. In general, pension funds are the best choice for investors who do not want to take risks. The pension fund is by far the highest low-risk investment for many people. But the pension fund also has a low return. “With an annuity rate of 8% per annum (annual), a pension of £20,000 per year requires a pension pot of £250,000” (Redhead, 2008: 1). In 1949, the first hedge fund was created by Alfred Jones. However, over the last 5 years, the expansion of hedge funds is truly incredible. According to the published statement, in 2005 the number of hedge funds increased from 1,435 to 2,073. Furthermore, globally, the estimate of hedge funds is around 12,000 in 2006 (Strachman, 2007). in every market it is an objective of hedge funds to be able to profit in any condition, whether positive, negative or stable. Hedge funds are usually a small private group suitable for wealthy people who accept high risks and wish to accept unlimited liability for losses (Liang, 1999). Hedge fund managers' investment skills may relate to hedge fund performance rather than market performance. Hedge funds use flexibility in investment strategy and style and also seek optimistic profits regardless of market performance. Short selling, leverage and derivatives are often used by hedge fund managers. Flexibility, self-governance with admiration of one's investment plans, and secrecy are desired by most hedge fund managers (Redhead, 2008:351). Shleifer and Vishny (1997) mentioned that investors, invested in hedge funds, who fire...... middle of paper......are affected by kurtosis and skewness" (Redhead, 2008: 356) . Gregoriou (2002) obtained with a study on the survival of hedge funds and certainly looks for the factors influenced by their lifespan several related factors related to long duration such as large size, high returns, low leverage and low minimum purchase requirements were the main cause of the initial closure of hedge funds large hedge funds with high returns had a reduced probability of paying off debt As a result, investors who invest with hedge funds should deeply learn and focus on information about the life of hedge funds because the funds cannot be withdrawn while investing. (Redhead, 2008:355).