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February 20, 2006
Brief History of Hedge Funds
The origin of the term "hedge fund" dates back to the first such fund founded by Alfred Winslow Jones in 1949. Jones followed his instinct and came up with the innovation to sell short some stocks while buying others, thus some of the market risk was hedged. Currently, there are over 7,000 hedge funds in the United States, with an estimated US $750 billion in assets with a strong role play in the financial market. They are believed to account for as much as 20% of all US stock trading. Hindustan Times Reports:
While most of today's hedge funds still trade stocks both long and short, many do not trade stocks at all and the term hedge fund has come to mean a relatively unregulated investment fund, often a partnership rather than a corporation in form, and characterized by unconventional strategies (ie, strategies other than investing long only in bonds, equities or money markets).
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