Captive Fund

Captive funds are investments that are offered to a single group of lucky bastards...er, we mean to a single group of well deserving, talented employees (or to a private entity). Similar to Z Shares, captive funds can be managed internally by the company or by a professional (like an institutional investment manager), and can also be used as an alternative investment vehicle for venture capital assets.

Seen as a lucrative employment perk by many, these funds manage employee capital and typically have a better rate of return than publicly traded funds. But they're not offered to the public nor are they available on any exchanges. Stinks right (well, at least for the rest of us)?

An example: the legendary, mega Medallion Fund from fund manager Renaissance Technologies, whose captive fund historically boasts fat, stratospheric returns for its employees year over year. How fat? Let's just say their employees aren't worried about eating beans and weenies every night or having enough to retire on. Wish you could participate? Us too, but don't quit your day job. We hear their employee turnover rate is pretty low...Wonder why that is?