Blow Up

DEFINITION of 'Blow Up'

A slang term used to describe the complete and abject failure of an individual, corporation, bank, development project, hedge fund, etc. The term is often used when a hedge fund fails, but is not exclusive to hedge funds.

BREAKING DOWN 'Blow Up'

Hedge funds frequently engage in high-risk investment tactics to try to aggressively accumulate capital gains. Often a hedge fund is so highly leveraged that losses can be catastrophic, and since a hedge fund can have extremely large portfolios, even a small percentage loss can lead to huge cash losses. As funds fail to perform, investors may withdraw, forcing the fund to dissolve or blow up. LTCM was one of the largest funds to blow up in hedge fund history.

RELATED TERMS
  1. Hedge Fund Manager

    The individual who oversees and makes decisions about the investments ...
  2. Hedge Fund

    An aggressively managed portfolio of investments that uses leveraged, ...
  3. Doing the Reverse Desk

    A slang phrase referring to a tactic a hedge fund would use to ...
  4. Gate Provision

    A restriction placed on a hedge fund limiting the amount of withdrawals ...
  5. Short Hedge

    An investment strategy that is focused on mitigating a risk that ...
  6. Run On The Fund

    A situation in which a hedge fund faces an increasing amount ...
Related Articles
  1. Mutual Funds & ETFs

    Hedge Funds

    Hedge Funds
  2. Professionals

    Hedge Fund Basics

    CFA Level 1 - Hedge Fund Basics. Learn the historical background of hedge funds and how they operate today. Discusses various hedging strategies and fund objectives.
  3. Mutual Funds & ETFs

    Hedge Funds

    Hedge Funds Introduction
  4. Investing News

    Will Hedge Funds Be Around in 10 Years?

    Learn why some analysts see hedge funds as a dying breed, especially after a torturous January 2016 for fund managers around the world.
  5. Mutual Funds & ETFs

    Evaluating Hedge Fund Performance

    Most investors are aware of hedge funds, but many don't know the dirty details of this unique investment type.
  6. Financial Advisors

    Why Hedge Funds Are Not Living Up to Return Hype

    Hedge funds are supposed to produce better returns while protecting your investments from the downside. Here's why they are not living up to their purpose.
  7. Investing

    Understanding a Hedge Fund Manager's Worth

    Hedge funds pool investors’ money much like mutual funds. However, they are not as closely regulated as mutual funds, and although their investments may include stocks, bonds and other traditional ...
  8. Fundamental Analysis

    HF Performance Report: Did Hedge Funds Earn Their Fee in 2015?

    Find out whether hedge funds, which have come under tremendous pressure to improve their performance, managed to earn their fee in 2015.
  9. Professionals

    Hedging

    Hedging
  10. Investing Basics

    6 Reasons Hedge Funds Underperform

    Understand the hedge fund industry and why it has grown exponentially since 1995. Learn about the top six reasons why the industry underperforms.
RELATED FAQS
  1. Can you invest in hedge funds?

    Read about what it takes to invest in a hedge fund, and learn how some investors find ways to indirectly capture a hedge ... Read Answer >>
  2. What is the purpose of a hedge fund?

    Find out what a hedge fund is, how it is set up and why it is different than other forms of investment partnerships like ... Read Answer >>
  3. How do hedge funds use short selling?

    Learn how hedge funds use short selling to profit from stocks that are falling in price. Explore different analytical techniques ... Read Answer >>
  4. What happens if you don't hedge your investments?

    Learn the purpose, advantages and disadvantages of hedging, and find out how to utilize hedging to enhance an overall investment ... Read Answer >>
  5. What does a hedge fund do?

    Read how hedge funds differ from other investment vehicles and how their investment strategies make them unique and potentially ... Read Answer >>
  6. Are there publicly traded hedge funds?

    See why a privately arranged hedge fund may decide to take its fund public, and how the investing public at large can gain ... Read Answer >>
Hot Definitions
  1. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  2. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  3. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center