The History of Hedge Funds
Former writer and sociologist of the company Alfred Winslow Jones, A.W. Jones & amp; Co. launched the first hedge fund company in 1949.When writing articles about current investment trends for Fortune in 1948, Jones was inspired to try to handle money. He collects $ 100,000 (including $ 40,000 from his own pocket) and proposes to minimize the risk of holding long-term stock positions by selling other shares short. This investment innovation is now referred to as the classic long/short equity model. Jones also uses leverage to increase returns.
Jones changed the structure of his investment vehicle, converted it from a general partnership into a limited partnership and added a 20% incentive fee as compensation for the managing partner. The first money manager that combines short selling, use leverage, shared risks through partnerships with another investors and compensation systems based on investment performance, Jones got his place in investing history as the father of hedge funds.
However, because of the growing trend of hedge funds, in an effort to maximize returns, many funds shift from Jones’ strategy, which focuses on choosing stocks plus hedging and choosing to use risk strategies based on long-term leverage. This tactic caused huge losses in 1969-70, followed by a number of hedge fund closures during the bearish market in 1973-74.
With the Hedge Fund attracting public attention with outstanding performance, investors are flocking to industries that now offer thousands of funds and a growing set of exotic strategies, including trading currencies and derivatives such as futures and options.
High-level money managers left the traditional mutual fund industry in droves in the early 1990s, seeking fame and fortune as hedge fund managers. Unfortunately, history repeats itself in the late 1990s and into the early 2000s because a number of high-profile hedge funds, including Robertson’s, failed in spectacular fashion.
Since then, the hedge fund industry has grown rapidly. Currently, the hedge fund industry is very large – the total assets managed in the industry are worth more than $ 3.2 trillion according to the 2016 Global Hedge Fund Preqin Report. The number of hedge funds is also growing.
Top 10 Hedge Fund Companies in the world
1 Associates LP: According to its website, the company based in Westport, Connecticut with around 1,400 employees manages global investments of $ 150 billion spread across institutional clients, central banks and the government. , company funds, and pension funds. It has $ 87.1 billion in hedge fund management, making it the largest hedge fund management company. J. P. Morgan Asset Management
2 A larger division of JPMorgan Chase & Co (JPM JPMJPMorgan Chase & Co98. 73-2. 03% Made with Highstock 4. 2. 6). Hedge fund management is part of JPM Asset Management, along with other asset class management. JPMorgan Chase had $ 2. 4 trillion in total assets under management as of December 2013, where Asset Management’s hedge funds had AUM of $ 59 billion. Och-Ziff Capital Management Group LLC
3 Founded in 1994 and based in New York, Och-Ziff (OZM OZMOch-Ziff Capital Management Group LLC3 22-1. 83% Made with Highstock 4. 2. 6) has $ 47.1 billion AUM as of December 2014. As specialist hedge funds, Och-Ziff has investments that focus on “multi-strategy funds, credit funds, guaranteed loan obligations (CLOs), real estate funds, equity funds and other alternative investment vehicles,” according to its website. Brevan Howard Asset Management LLP
4 Founded in 2002, Brevan Howard is a private company based in London with a global office and around $ 40 billion of managed hedge fund assets. This is the biggest hedge fund in Europe for AUM. The hedge fund business centre on several assets, including currencies and commodities, along with ordinary equity, derivatives, and fixed income securities. The main strategy is focused on short-term profit opportunities within a period of up to six months, based on emerging economic trends. BlueCrest Capital Management
5 BlueCrest was founded in 2000 and has offices throughout the world. It operates under two streams: alternative investment management and hedge fund management. Their hedge funds are reported to be around $ 34.2 billion as of December 2013, making it one of the leading European and global hedge fund management companies. BlackRock
6New York-based company with more than 11,000 employees is one of the largest asset management companies, has a diversified portfolio of financial services from savings to insurance to personal equity and more. It has AUM $ 4. 32 trillion in total, with $ 31. 323 billion in hedge fund management AQR Capital Management LLC
7 Founded in 1998 at Greenwich, CT, AQR has a total AUM of around $ 114.7 billion as of September 2014, of which $ 29.9 billion is in the management of hedge funds. His investment style focuses on global investments in public equity, futures and public options, public bonds, private bonds, and over-the-counter derivatives. Lone Pine Capital LLC
8 Founded in 1997 at Greenwich, CT, the Lone Pine Capital investment style combines fundamental analysis with a bottom-up approach, using a long and short approach to investing in global public equity. AUM’s hedge funds reportedly reached $ 29 billion. Man Group plc
9 Listed on the London Stock Exchange, the London-based Man Group, founded in 1783, has $ 28.3 billion AUM in hedge funds (out of a total AUM $ 57.7 billion) as of June 2014. Through the multiple money manager division, namely AHL (managed futures), GLG Partners (traditional, alternative and hybrid investment management), FRM (hedge fund) and Man Numeric (quantitative asset management), this is one of the leading hedge fund management houses. Viking Global Investors
10 Greenwich, Global Viking based CT was founded in 1999 and has an AUM hedge fund of $ 27.1 billion.
The challenge with hedge fund data is that most of the funds are privately owned and only clients are given access to detailed reports. The numbers mentioned here come from official sources (company website/report) available at the time of writing, with little taken from other sources, including Institutional Investor’s Alpha.