Hedge Funds

Hedge Funds are professionally managed funds that use a variety of financial instruments, such as stocks, bonds, short-term money market and other securities, in order to generate a return on investment. Hedge funds are designed to produce higher returns than comparable investments (i.e. mutual funds) because it is constructed to "hedge" downturns in the market.

Fast Facts:

1. 1949: Alfred Winslow Jones created the first hedge fund
2. Hedge fund managers must be accredited, which means they must meet outlined financial criteria
3. Hedge funds generally charge a performance fee (the manager's share of positive returns)
4. Hedge Funds are not regulated by the SEC
5. Participation in a hedge fund is limited and minimum investments are applied
6. Hedge Funds are not insured by the FDIC
7. The hedge fund industry is estimated to be nearly a $1 trillion industry with a 20% annual growth rate¹

2007 Top Fund Managers²

• John Paulson, Paulson & Co.
• Phil Falcone, Harbinger Capital Partners
• Jim Simons, Renaissance Technologies Corp.
• Steve Cohen, SAC Capital Advisors
• Ken Griffin, Citadel Investment Group

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