A hedge fund is structured as a private investment vehicle, but its legal and regulatory classification differs significantly from standard registered investment companies like mutual funds or closed-end funds. Hedge funds typically operate as private pooled investment funds that utilize exemption clauses under securities laws—such as exclusions for private funds catering exclusively to accredited or institutional investors—meaning they are subject to lighter regulatory reporting requirements compared to publicly registered investment companies. Consequently, they employ diverse, aggressive strategies including leverage, short selling, and derivatives trading that are restricted for public investment vehicles.