Although the media and many investors perceive hedge funds to be uniformly risky, the facts are that little about the hedge fund universe is homogenous. Some hedge funds hedge, whereas others take directional market risks. As a result of the private and opaque nature of hedge fund investing, a multitude of data challenges exist because hedge funds are not required to report their returns to regulators or any single database. Much of the literature describes adjustments and caveats to working with as-reported hedge fund returns and risk data.