A hedge fund is a private equity fund that manages capital in such a way as to maximize funds with c
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However, the trend of hedge funds has evolved and, in order to maximize returns, many funds have abandoned Jones' strategy, which focuses on equity choices combined with hedging, and have become more risky. This tactic led to significant losses in 1969-70, followed by the closure of a number of hedge funds on the market in 1973-1974.
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In 1952, Jones changed the structure of his investment instrument, transforming it from a general partnership to a limited liability company, and including a 20% fee as compensation for the management partner. The popularity of hedge funds began to outpace most mutual funds in the 1960s and has grown further since then.
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Former writer and sociologist Alfred Winslow Jones, A.V. Jones & Co. launched the first hedge fund in 1949. This was at the time of writing an article on current investment trends in 1948. He raised $ 100,000 (including $ 40,000 out of his own pocket) and said he intended to minimize the risk of holding long-term positions on the stock exchange by selling other shares short-term. This innovative investment is now called the classic long / short stock model. Jones also used leverage to increase profits.
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Professional funds in offshore jurisdictions offer more simplified terms (investment capital of $ 100,000 and no limit on the equity of the leading company).
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By law, U.S. hedge funds are only eligible to serve qualified investors with a down payment of at least $ 5 million for private investors and $ 25 million for institutional eligible investors. Unrestricted regulation means unlimited strategy and unlimited margin leverage.
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Hedge funds can be aggressively managed or use derivatives and credit resources in both domestic and international markets to achieve high returns. Hedge funds are usually only available to accredited investors because they are subject to fewer SEC restrictions than other funds. One of the aspects outlined by the hedge fund industry is that hedge funds face less regulation than mutual funds and other investment funds [3]. This type of investment was discovered by Alfred Winslow Jones.