Hedge funds rarely pay dividends to the accredited investors who invest directly in them. Instead, these investors share in the profits and losses of the funds. A handful of hedge funds are publicly traded, which means any stock market investor, not just accredited ones, can purchase ownership shares. Of these funds, an even fewer number pay dividends, but a few exist that pay consistent and handsome dividend yields.

How Hedge Funds Operate

A hedge funds collects money from a pool of accredited investors and then uses that money to chase large returns by seeking out nontraditional investment opportunities. Hedge fund investments are typically high-risk, high-reward. Not just anyone can invest in a hedge fund; the minimum investment is often quite large, and hedge fund investments are illiquid, most requiring at least a one-year commitment of funds. While accredited investors share in the fund's profits, which are often substantial, they rarely, if ever, receive dividends.

Most hedge funds are not publicly traded. In fact, one reason hedge fund investors gravitate to them is that they are not subject to the regulations and disclosures of publicly traded firms. That said, a few hedge funds are public, which opens them up to investment by anyone in the market.

Hedge Funds That Pay Dividends

As of 2015, several publicly traded hedge funds pay consistent dividends. For example, Oak Tree Capital Group, LLC., based in California, began paying dividends in 2012. The firm attracts public investment with a very attractive dividend yield of 7.95%. BlackRock, Inc., one of the biggest players in the hedge fund industry, began paying a dividend in 2003 and has increased the yield every year except the tumultuous 2009. As of 2015, BlackRock's dividend yield stands at 3.21%.

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