Hedge Funds
Quantitative Insights
Chapter One
Characteristics of Hedge Funds
I don't play the game by a particular set of rules; I look for changes in the rules of the game.
A global macro manager
While their mainstream popularity seems to be a new phenomenon, hedge funds have been
around for more than 50 years. Indeed, Alfred Winslow Jones, journalist, sociologist and fund
manager, is credited with establishing the first hedge fund as a general partnership in 1949.
He operated in complete secrecy until 1966. Then, an article penned by Carol J. Loomis in
the April edition of Fortune Magazine, entitled "The Jones that Nobody Keeps Up With",
exposed to the public his unique and highly successful strategy ("speculative instruments for
conservative purposes"), along with his truly astounding return rates. Since then, the number
of hedge funds and the size of their assets have soared, particularly since the early 1990s.
Estimates suggest there are now over 6000 active hedge funds managing around $600 billion
in assets, compared with the 68 funds that existed in 1984.
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