Puerto Rico is confronting vulture hedge funds Hedge funds Unlisted investment funds that exist for purposes of speculation and that seek high returns, make liberal use of derivatives, especially options, and frequently make use of leverage. The main hedge funds are independent of banks, although banks frequently have their own hedge funds. Hedge funds come under the category of shadow banking. that are massively buying back its debt at a fraction of the original price. These powerful financial institutions are lobbying the US Congress to impose a draconian tax board in order to secure their illegitimate profits.