Hedge Fund Reader : Hedge Funds Going Mainstream

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November 24, 2005

Hedge Funds Going Mainstream

In an effort to bring the concept of hedge funds to the mainstream, J. P. Morgan Chase is marketing a new mutual fund, the Highbridge Statistical Market Neutral fund. The new fund is to be managed by Highbridge Capital Management, the $9bn hedge fund house that J. P. Morgan Chase acquired in 2004.

J.P. Morgan Chase expects the fund to have its appeal among less wealthy investors who could not otherwise invest in a hedge fund. This goes on to show that how hedge funds, which were exclusively the domain of the filthy rich, have now started to gain footing among the affluent investor segment. Assets in hedge fund partnerships have increased drastically in recent years, reaching up to $1.1 trillion.

Further, the acceptability and accessibility to hedge funds is increasing, with investment banks offering the less wealthy a back-door entry. This is done by lowering the minimum investment required to invest in funds that in turn invest in pools of hedge funds, known as funds of funds. Nytimes reports:

More and more investors - from individuals to huge pension funds - have been persuaded that hedge funds can be an alternative to a lackluster stock market. For as little as $10,000, you, too, can invest in a hedge fund - or, to be precise, in a mutual fund run by a hedge fund manager.

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November 24, 2005 in Emerging Markets | Permalink