History of Hedge Funds

History of Hedge Funds

The First Hedge Fund - History of Hedge Funds

History of Hedge FundsTo many people just starting to get involved in the investment world, the concept of a Hedge Fund is sometimes hard to understand. Whenever something is unclear it always helps us to look at its history to discover more about it. This fact applies to hedge funds as well and by looking at their history, we can hopefully better understand them.

The first ever hedge fund was created in 1949 by Alfred W. Jones. For many years, actions such as short selling and leveraging had occurred independently. It was Jones who first used them together. Only three years after he set up the first hedge fund Jones and a few independent portfolio managers expanded his hedge fund and started the first ever “multi-manager” hedge fund.

In 1966 Fortune magazine article about hedge funds made the investment world’s jaw drop. This article, written by none other than Alfred W. Jones, detailed how his own hedge fund had outperformed all the mutual funds of his time. Even more surprising was that these statistics had already taken into account a huge 20% incentive fee. Ever since the success of Jones’ hedge fund was made public, hedge funds have skyrocketed in popularity with total assets under management today reaching almost $2 Trillion.

Also - watch our video on this topic - History of Hedge Funds Video

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Related Terms: History of Hedge Funds, Hedge Fund History, Hedge Fund Industry History, First Hedge Fund, Alfred Jones, First Hedge Fund Manager, Alfred W. Jones, Founder of Hedge Funds